Parts for H. Rept. 109-601

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109th Congress Rept. 109-601
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
BETTER HEALTH INFORMATION SYSTEM ACT OF 2006
_______
July 26, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Barton of Texas, from the Committee on Energy and Commerce,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4157]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4157) to amend the Social Security Act to
encourage the dissemination, security, confidentiality, and
usefulness of health information technology, having considered
the same, report favorably thereon with amendments and
recommend that the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 13
Background and Need for Legislation.............................. 14
Hearings......................................................... 22
Committee Consideration.......................................... 23
Committee Votes.................................................. 23
Committee Oversight Findings..................................... 32
Statement of General Performance Goals and Objectives............ 32
New Budget Authority, Entitlement Authority, and Tax Expenditures 32
Committee Cost Estimate.......................................... 32
Congressional Budget Office Estimate............................. 32
Federal Mandates Statement....................................... 37
Advisory Committee Statement..................................... 37
Constitutional Authority Statement............................... 37
Applicability to Legislative Branch.............................. 38
Section-by-Section Analysis of the Legislation................... 38
Changes in Existing Law Made by the Bill, as Reported............ 40
Dissenting Views................................................. 54
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Better Health
Information System Act of 2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Preserving privacy and security laws.
TITLE I--COORDINATION FOR, PLANNING FOR, AND INTEROPERABILITY OF HEALTH
INFORMATION TECHNOLOGY
Sec. 101. Office of the National Coordinator for Health Information
Technology.
Sec. 102. Report on the American Health Information Community.
Sec. 103. Interoperability planning process; Federal information
collection activities.
Sec. 104. Ensuring health care providers may maintain health
information in electronic form.
Sec. 105. Study and report on State, regional, and community health
information exchanges.
Sec. 106. Grants to integrated health systems to promote health
information technologies to improve coordination of care for the
uninsured, underinsured, and medically underserved.
Sec. 107. Demonstration program.
TITLE II--EXPEDITED MODIFICATION PROCEDURES FOR AND ADOPTION OF
TRANSACTIONAL STANDARDS AND CODES
Sec. 201. Procedures to ensure timely updating of standards that enable
electronic exchanges.
Sec. 202. Upgrading ASC X12 and NCPDP standards.
Sec. 203. Coding and documentation of non-medical information.
TITLE III--PROMOTING THE USE OF HEALTH INFORMATION TECHNOLOGY TO BETTER
COORDINATE HEALTH CARE
Sec. 301. Safe harbors to antikickback civil penalties and criminal
penalties for provision of health information technology and training
services.
Sec. 302. Exception to limitation on certain physician referrals (under
Stark) for provision of health information technology and training
services to health care professionals.
SEC. 2. PRESERVING PRIVACY AND SECURITY LAWS.
Nothing in this Act (or the amendments made by this Act) shall be
construed to affect the scope, substance, or applicability of section
264(c) of the Health Insurance Portability and Accountability Act of
1996 and any regulation issued pursuant to such section.
TITLE I--COORDINATION FOR, PLANNING FOR, AND INTEROPERABILITY OF HEALTH
INFORMATION TECHNOLOGY
SEC. 101. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
(a) In General.--Title II of the Public Health Service Act is amended
by adding at the end the following new part:
``PART D--HEALTH INFORMATION TECHNOLOGY
``SEC. 271. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
``(a) Establishment.--There is established within the Department of
Health and Human Services an Office of the National Coordinator for
Health Information Technology that shall be headed by the National
Coordinator for Health Information Technology (referred to in this part
as the `National Coordinator'). The National Coordinator shall be
appointed by and report directly to the Secretary. The National
Coordinator shall be paid at a rate equal to the rate of basic pay for
level IV of the Executive Schedule.
``(b) Goals of Nationwide Interoperable Health Information Technology
Infrastructure.--The National Coordinator shall perform the duties
under subsection (c) in a manner consistent with the development of a
nationwide interoperable health information technology infrastructure
that--
``(1) improves health care quality, promotes data accuracy,
reduces medical errors, increases the efficiency of care, and
advances the delivery of appropriate, evidence-based health
care services;
``(2) promotes wellness, disease prevention, and management
of chronic illnesses by increasing the availability and
transparency of information related to the health care needs of
an individual for such individual;
``(3) promotes the availability of appropriate and accurate
information necessary to make medical decisions in a usable
form at the time and in the location that the medical service
involved is provided;
``(4) produces greater value for health care expenditures by
reducing health care costs that result from inefficiency,
medical errors, inappropriate care, and incomplete or
inaccurate information;
``(5) promotes a more effective marketplace, greater
competition, greater systems analysis, increased consumer
choice, enhanced quality, and improved outcomes in health care
services;
``(6) with respect to health information of consumers,
advances the portability of such information and the ability of
such consumers to share and use such information to assist in
the management of their health care;
``(7) improves the coordination of information and the
provision of such services through an effective infrastructure
for the secure and authorized exchange and use of health care
information;
``(8) is consistent with legally applicable requirements with
respect to securing and protecting the confidentiality of
individually identifiable health information of a patient;
``(9) promotes the creation and maintenance of transportable,
secure, Internet-based personal health records, including
promoting the efforts of health care payers and health plan
administrators for a health plan, such as Federal agencies,
private health plans, and third party administrators, to
provide for such records on behalf of members of such a plan;
``(10) promotes access to and review of the electronic health
record of a patient by such patient;
``(11) promotes health research and health care quality
research and assessment; and
``(12) promotes the efficient and streamlined development,
submission, and maintenance of electronic health care clinical
trial data.
``(c) Duties of the National Coordinator.--
``(1) Strategic planner for interoperable health information
technology.--The National Coordinator shall provide for a
strategic plan for the nationwide implementation of
interoperable health information technology in both the public
and private health care sectors consistent with subsection (b).
``(2) Principal advisor to the secretary.--The National
Coordinator shall serve as the principal advisor to the
Secretary on the development, application, and use of health
information technology, and shall coordinate the policies and
programs of the Department of Health and Human Services for
promoting the use of health information technology.
``(3) Intragovernmental coordinator.--The National
Coordinator shall ensure that health information technology
policies and programs of the Department of Health and Human
Services are coordinated with those of relevant executive
branch agencies and departments with a goal to avoid
duplication of effort, to align the health information
architecture of each agency or department toward a common
approach, to ensure that each agency or department conducts
programs within the areas of its greatest expertise and its
mission in order to create a national interoperable health
information system capable of meeting national public health
needs effectively and efficiently, and to assist Federal
agencies and departments in security programs, policies, and
protections to prevent unauthorized access to individually
identifiable health information created, maintained, or in the
temporary possession of that agency or department. The
coordination authority provided to the National Coordinator
under the previous sentence shall supercede any such authority
otherwise provided to any other official of the Department of
Health and Human Services. For the purposes of this paragraph,
the term `unauthorized access' means access that is not
authorized by that agency or department including unauthorized
employee access.
``(4) Advisor to omb.--The National Coordinator shall provide
to the Director of the Office of Management and Budget comments
and advice with respect to specific Federal health information
technology programs.
``(5) Promoter of health information technology in medically
underserved communities.--The National Coordinator shall--
``(A) identify sources of funds that will be made
available to promote and support the planning and
adoption of health information technology in medically
underserved communities, including in urban and rural
areas, either through grants or technical assistance;
``(B) coordinate with the funding sources to help
such communities connect to identified funding; and
``(C) collaborate with the Agency for Healthcare
Research and Quality and the Health Services Resources
Administration and other Federal agencies to support
technical assistance, knowledge dissemination, and
resource development, to medically underserved
communities seeking to plan for and adopt technology
and establish electronic health information networks
across providers.''.
(b) Treatment of Executive Order 13335.--Executive Order 13335 shall
not have any force or effect after the date of the enactment of this
Act.
(c) Transition From ONCHIT Under Executive Order.--
(1) In general.--All functions, personnel, assets,
liabilities, administrative actions, and statutory reporting
requirements applicable to the old National Coordinator or the
Office of the old National Coordinator on the date before the
date of the enactment of this Act shall be transferred, and
applied in the same manner and under the same terms and
conditions, to the new National Coordinator and the Office of
the new National Coordinator as of the date of the enactment of
this Act.
(2) Rule of construction.-- Nothing in this section or the
amendment made by this section shall be construed as requiring
the duplication of Federal efforts with respect to the
establishment of the Office of the National Coordinator for
Health Information Technology, regardless of whether such
efforts are carried out before or after the date of the
enactment of this Act.
(3) Acting national coordinator.--Before the appointment of
the new National Coordinator, the old National Coordinator
shall act as the National Coordinator for Health Information
Technology until the office is filled as provided in section
271(a) of the Public Health Service Act, as added by subsection
(a). The Secretary of Health and Human Services may appoint the
old National Coordinator as the new National Coordinator.
(4) Definitions.--For purposes of this subsection:
(A) New national coordinator.--The term ``new
National Coordinator'' means the National Coordinator
for Health Information Technology appointed under
section 271(a) of the Public Health Service Act, as
added by subsection (a).
(B) Old national coordinator.--The term ``old
National Coordinator'' means the National Coordinator
for Health Information Technology appointed under
Executive Order 13335.
SEC. 102. REPORT ON THE AMERICAN HEALTH INFORMATION COMMUNITY.
Not later than one year after the date of the enactment of this Act,
the Secretary of Health and Human Services shall submit to Congress a
report on the work conducted by the American Health Information
Community (in this section referred to as ``AHIC''), as established by
the Secretary. Such report shall include the following:
(1) A description of the accomplishments of AHIC, with
respect to the promotion of the development of national
guidelines, the development of a nationwide health information
network, and the increased adoption of health information
technology.
(2) Information on how model privacy and security policies
may be used to protect confidentiality of health information,
and an assessment of how existing policies compare to such
model policies.
(3) Information on the progress in--
(A) establishing uniform industry-wide health
information technology standards;
(B) achieving an internet-based nationwide health
information network; and
(C) achieving interoperable electronic health record
adoption across health care providers.
(4) Recommendations for the transition of AHIC to a longer-
term advisory and facilitation entity, including--
(A) a schedule for such transition;
(B) options for structuring the entity as either a
public-private or private sector entity;
(C) the role of the Federal Government in the entity;
(D) steps for--
(i) continued leadership in the facilitation
of guidelines or standards;
(ii) the alignment of financial incentives;
and
(iii) the long-term plan for health care
transformation through information technology;
and
(E) the elimination or revision of the functions of
AHIC during the development of the nationwide health
information network.
SEC. 103. INTEROPERABILITY PLANNING PROCESS; FEDERAL INFORMATION
COLLECTION ACTIVITIES.
Part D of title II of the Public Health Service Act, as added by
section 101, is amended by adding at the end the following new section:
``SEC. 272. INTEROPERABILITY PLANNING PROCESS; FEDERAL INFORMATION
COLLECTION ACTIVITIES.
``(a) Strategic Interoperability Planning Process.--
``(1) Assessment and endorsement of core strategic
guidelines.--
``(A) In general.--Not later than December 31, 2006,
the National Coordinator shall publish a strategic
plan, including a schedule, for the assessment and the
endorsement of core interoperability guidelines for
significant use cases consistent with this subsection.
The National Coordinator may update such plan from time
to time.
``(B) Endorsement.--
``(i) In general.--Consistent with the
schedule under this paragraph and not later
than one year after the publication of such
schedule, the National Coordinator shall
endorse a subset of core interoperability
guidelines for significant use cases. The
National Coordinator shall continue to endorse
subsets of core interoperability guidelines for
significant use cases annually consistent with
the schedule published pursuant to this
paragraph, with endorsement of all such
guidelines completed not later than August 31,
2009.
``(ii) Consultation.--All such endorsements
shall be in consultation with the American
Health Information Community and other
appropriate entities.
``(iii) Voluntary compliance.--Compliance
with such guidelines shall be voluntary,
subject to subsection (b)(1).
``(C) Consultation with other parties.--The National
Coordinator shall develop and implement such strategic
plan in consultation with the American Health
Information Community and other appropriate entities.
``(D) Definitions.--For purposes of this section:
``(i) Interoperability guideline.--The term
`interoperability guideline' means a guideline
to improve and promote the interoperability of
health information technology for purposes of
electronically accessing and exchanging health
information. Such term includes named
standards, architectures, software schemes for
identification, authentication, and security,
and other information needed to ensure the
reproducible development of common solutions
across disparate entities.
``(ii) Core interoperability guideline.--The
term `core interoperability guideline' means an
interoperability guideline that the National
Coordinator determines is essential and
necessary for purposes described in clause (i).
``(iii) Significant use case.--The term
`significant use case' means a category (as
specified by the National Coordinator) that
identifies a significant use or purpose for the
interoperability of health information
technology, such as for the exchange of
laboratory information, drug prescribing,
clinical research, and electronic health
records.
``(2) National survey.--
``(A) In general.--Not later than August 31, 2008,
the National Coordinator shall conduct one or more
surveys designed to measure the capability of entities
(including Federal agencies, State and local government
agencies, and private sector entities) to exchange
electronic health information by appropriate
significant use case. Such surveys shall identify the
extent to which the type of health information, the use
for such information, or any other appropriate
characterization of such information may relate to the
capability of such entities to exchange health
information in a manner that is consistent with methods
to improve the interoperability of health information
and with core interoperability guidelines.
``(B) Dissemination of survey results.--The National
Coordinator shall disseminate the results of such
surveys in a manner so as to--
``(i) inform the public on the capabilities
of entities to exchange electronic health
information;
``(ii) assist in establishing a more
interoperable information architecture; and
``(iii) identify the status of health
information systems used in Federal agencies
and the status of such systems with respect to
interoperability guidelines.
``(b) Federal Health Information Collection Activities.--
``(1) Requirements.--With respect to a core interoperability
guideline endorsed under subsection (a)(1)(B) for a significant
use case, the President shall take measures to ensure that
Federal activities involving the broad collection and
submission of health information are consistent with such
guideline within three years after the date of such
endorsement.
``(2) Promoting use of non-identifiable health information to
improve health research and health care quality.--
``(A) In general.--Where feasible, and consistent
with applicable privacy or security or other laws, the
President, in consultation with the Secretary, shall
take measures to allow timely access to useful
categories of non-identifiable health information in
records maintained by the Federal government, or
maintained by entities under contract with the Federal
government, to advance health care quality and health
research where such information is in a form that can
be used in such research. The President shall consult
with appropriate Federal agencies, and solicit public
comment, on useful categories of information, and
appropriate measures to take. The President may
consider the administrative burden and the potential
for improvements in health care quality in determining
such appropriate measures. In addition, the President,
in consultation with the Secretary, shall encourage
voluntary private and public sector efforts to allow
access to such useful categories of non-identifiable
health information to advance health care quality and
health research.
``(B) Non-identifiable health information defined.--
For purposes of this paragraph, the term `non-
identifiable health information' means information that
is not individually identifiable health information as
defined in rules promulgated pursuant to section 264(c)
of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. 1320d-2 note), and includes
information that has been de-identified so that it is
no longer individually identifiable health information,
as defined in such rules.
``(3) Annual review and report.--For each year during the
five-year period following the date of the enactment of this
section, the National Coordinator shall review the operation of
health information collection by and submission to the Federal
government and the purchases (and planned purchases) of health
information technology by the Federal government. For each such
year and based on the review for such year, the National
Coordinator shall submit to the President and Congress
recommendations on methods to--
``(A) streamline (and eliminate redundancy in)
Federal systems used for the collection and submission
of health information;
``(B) improve efficiency in such collection and
submission;
``(C) increase the ability to assess health care
quality; and
``(D) reduce health care costs.''.
SEC. 104. ENSURING HEALTH CARE PROVIDERS MAY MAINTAIN HEALTH
INFORMATION IN ELECTRONIC FORM.
Part D of title II of the Public Health Service Act, as added by
section 101(a) and amended by section 103, is amended by adding at the
end the following new section:
``SEC. 273. ENSURING HEALTH CARE PROVIDERS MAY MAINTAIN HEALTH
INFORMATION IN ELECTRONIC FORM.
``(a) In General.--Any health care provider that participates in a
health care program that receives Federal funds shall be deemed as
meeting any requirement for the maintenance of data in paper form under
such program (whether or not for purposes of management, billing,
reporting, reimbursement, or otherwise) if the required data is
maintained in an electronic form.
``(b) Relation to State Laws.--Beginning on the date that is one year
after the date of the enactment of this section, subsection (a) shall
supersede any contrary provision of State law.
``(c) Construction.--Nothing in this section shall be construed as--
``(1) requiring health care providers to maintain or submit
data in electronic form;
``(2) preventing a State from permitting health care
providers to maintain or submit data in paper form; or
``(3) preventing a State from requiring health care providers
to maintain or submit data in electronic form.''.
SEC. 105. STUDY AND REPORT ON STATE, REGIONAL, AND COMMUNITY HEALTH
INFORMATION EXCHANGES.
(a) Study.--The Secretary of Health and Human Services shall conduct
a study on issues related to the development, operation, and
implementation of State, regional, and community health information
exchanges. Such study shall include the following, with respect to such
health information exchanges:
(1) Profiles detailing the current stages of such health
information exchanges with respect to the progression of the
development, operation, implementation, organization, and
governance of such exchanges.
(2) The impact of such exchanges on healthcare quality,
safety, and efficiency, including--
(A) any impact on the coordination of health
information and services across healthcare providers
and other organizations relevant to health care;
(B) any impact on the availability of health
information at the point-of-care to make timely medical
decisions;
(C) any benefits with respect to the promotion of
wellness, disease prevention, and chronic disease
management;
(D) any improvement with respect to public health
preparedness and response;
(E) any impact on the widespread adoption of
interoperable health information technology, including
electronic health records;
(F) any contributions to achieving an Internet-based
national health information network;
(G) any contribution of health information exchanges
to consumer access and to consumers' use of their
health information; and
(H) any impact on the operation of--
(i) the Medicaid program;
(ii) the State Children's Health Insurance
Program (SCHIP);
(iii) disproportionate share hospitals
described in section 1923 of the Social
Security Act;
(iv) Federally-qualified health centers; or
(v) managed care plans, if a significant
number of the plan's enrollees are
beneficiaries in the Medicaid program or SCHIP.
(3) Best practice models for financing, incentivizing, and
sustaining such health information exchanges.
(4) Information identifying the common principles, policies,
tools, and standards used (or proposed) in the public and
private sectors to support the development, operation, and
implementation of such health information exchanges.
(5) A description of any areas in which Federal government
leadership is needed to support growth and sustainability of
such health information exchanges.
(b) Report.--Not later than one year after the date of enactment of
this Act, the Secretary of Health and Human Services shall submit to
Congress a report on the study described in subsection (a), including
such recommendations as the Secretary determines appropriate to
facilitate the development, operation, and implementation of health
information exchanges.
SEC. 106. GRANTS TO INTEGRATED HEALTH SYSTEMS TO PROMOTE HEALTH
INFORMATION TECHNOLOGIES TO IMPROVE COORDINATION OF
CARE FOR THE UNINSURED, UNDERINSURED, AND MEDICALLY
UNDERSERVED.
Subpart I of part D of title III of the Public Health Service Act (42
U.S.C. 254b et seq.) is amended by adding at the end the following:
``SEC. 330M. GRANTS FOR IMPROVEMENT OF THE COORDINATION OF CARE FOR THE
UNINSURED, UNDERINSURED, AND MEDICALLY UNDERSERVED.
``(a) In General.--The Secretary may make grants to integrated health
care systems, in accordance with this section, for projects to better
coordinate the provision of health care through the adoption of new
health information technology, or the significant improvement of
existing health information technology, to improve the provision of
health care to uninsured, underinsured, and medically underserved
individuals (including in urban and rural areas) through health-related
information about such individuals, throughout such a system and at the
point of service.
``(b) Eligibility.--
``(1) Application.--To be eligible to receive a grant under
this section, an integrated health care system shall prepare
and submit to the Secretary an application, at such time, in
such manner, and containing such information as the Secretary
may require, including--
``(A) a description of the project that the system
will carry out using the funds provided under the
grant;
``(B) a description of the manner in which the
project funded under the grant will advance the goal
specified in subsection (a); and
``(C) a description of the populations to be served
by the adoption or improvement of health information
technology.
``(2) Optional reporting condition.--The Secretary may also
condition the provision of a grant to an integrated health care
system under this section for a project on the submission by
such system to the Secretary of a report on the impact of the
health information technology adopted (or improved) under such
project on the delivery of health care and the quality of care
(in accordance with applicable measures of such quality). Such
report shall be at such time and in such form and manner as
specified by the Secretary.
``(c) Integrated Health Care System Defined.--For purposes of this
section, the term `integrated health care system' means a system of
health care providers that is organized to provide care in a
coordinated fashion and has a demonstrated commitment to provide
uninsured, underinsured, and medically underserved individuals with
access to such care.
``(d) Priorities.--In making grants under this section, the Secretary
shall give priority to an integrated health care system--
``(1) that can demonstrate past successful community-wide
efforts to improve the quality of care provided and the
coordination of care for the uninsured, underinsured, and
medically underserved; or
``(2) if the project to be funded through such a grant--
``(A) will improve the delivery of health care and
the quality of care provided; and
``(B) will demonstrate savings for State or Federal
health care benefits programs or entities legally
obligated under Federal law to provide health care from
the reduction of duplicative health care services,
administrative costs, and medical errors.
``(e) Limitation, Matching Requirement, and Conditions.--
``(1) Limitation on use of funds.--None of the funds provided
under a grant made under this section may be used for a project
providing for the adoption or improvement of health information
technology that is used exclusively for financial record
keeping, billing, or other non-clinical applications.
``(2) Matching requirement.--To be eligible for a grant under
this section an integrated health care system shall contribute
non-Federal contributions to the costs of carrying out the
project for which the grant is awarded in an amount equal to $1
for each $5 of Federal funds provided under the grant.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $15,000,000 for each of fiscal
years 2007 and 2008.''.
SEC. 107. DEMONSTRATION PROGRAM.
(a) In General.--The Secretary of Health and Human Services shall
establish a demonstration program under which the Secretary makes
grants to small physician practices (including such practices that
furnish services to individuals with chronic illnesses) that are
located in rural areas or medically underserved urban areas for the
purchase and support of health information technology.
(b) Eligibility.--To be eligible to receive a grant under this
section, an applicant shall prepare and submit to the Secretary of
Health and Human Services an application, at such time, in such manner,
and containing such information, as the Secretary may require.
(c) Reporting.--
(1) Required reports by small physician practices.--A small
physician practice receiving a grant under subsection (a) shall
submit to the Secretary of Health and Human Services an
evaluation on the health information technology funded by such
grant. Such evaluation shall include information on--
(A) barriers to the adoption of health information
technology by the small physician practice;
(B) issues for such practice in the use of health
information technology;
(C) the effect health information technology will
have on the quality of health care furnished by such
practice; and
(D) the effect of the rules under sections 1128A,
1128B, and 1877 of the Social Security Act and any
medical liability rules on such practice.
(2) Report to congress.--Not later than January 1, 2009, the
Secretary of Health and Human Services shall submit to Congress
a report on the results of the demonstration program under this
section.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2007 and 2008.
TITLE II--EXPEDITED MODIFICATION PROCEDURES FOR AND ADOPTION OF
TRANSACTIONAL STANDARDS AND CODES
SEC. 201. PROCEDURES TO ENSURE TIMELY UPDATING OF STANDARDS THAT ENABLE
ELECTRONIC EXCHANGES.
Section 1174(b) of the Social Security Act (42 U.S.C. 1320d-3(b)) is
amended--
(1) in paragraph (1)--
(A) in the first sentence, by inserting ``and in
accordance with paragraph (3)'' before the period; and
(B) by adding at the end the following new sentence:
``For purposes of this subsection and section
1173(c)(2), the term `modification' includes a new
version or a version upgrade.''; and
(2) by adding at the end the following new paragraph:
``(3) Expedited procedures for adoption of additions and
modifications to standards.--
``(A) In general.--For purposes of paragraph (1), the
Secretary shall provide for an expedited upgrade
program (in this paragraph referred to as the `upgrade
program'), in accordance with this paragraph, to
develop and approve additions and modifications to the
standards adopted under section 1173(a) to improve the
quality of such standards or to extend the
functionality of such standards to meet evolving
requirements in health care.
``(B) Publication of notices.--Under the upgrade
program:
``(i) Voluntary notice of initiation of
process.--Not later than 30 days after the date
the Secretary receives a notice from a standard
setting organization that the organization is
initiating a process to develop an addition or
modification to a standard adopted under
section 1173(a), the Secretary shall publish a
notice in the Federal Register that--
``(I) identifies the subject matter
of the addition or modification;
``(II) provides a description of how
persons may participate in the
development process; and
``(III) invites public participation
in such process.
``(ii) Voluntary notice of preliminary draft
of additions or modifications to standards.--
Not later than 30 days after the date of the
date the Secretary receives a notice from a
standard setting organization that the
organization has prepared a preliminary draft
of an addition or modification to a standard
adopted by section 1173(a), the Secretary shall
publish a notice in the Federal Register that--
``(I) identifies the subject matter
of (and summarizes) the addition or
modification;
``(II) specifies the procedure for
obtaining the draft;
``(III) provides a description of how
persons may submit comments in writing
and at any public hearing or meeting
held by the organization on the
addition or modification; and
``(IV) invites submission of such
comments and participation in such
hearing or meeting without requiring
the public to pay a fee to participate.
``(iii) Notice of proposed addition or
modification to standards.--Not later than 30
days after the date of the date the Secretary
receives a notice from a standard setting
organization that the organization has a
proposed addition or modification to a standard
adopted under section 1173(a) that the
organization intends to submit under
subparagraph (D)(iii), the Secretary shall
publish a notice in the Federal Register that
contains, with respect to the proposed addition
or modification, the information required in
the notice under clause (ii) with respect to
the addition or modification.
``(iv) Construction.--Nothing in this
paragraph shall be construed as requiring a
standard setting organization to request the
notices described in clauses (i) and (ii) with
respect to an addition or modification to a
standard in order to qualify for an expedited
determination under subparagraph (C) with
respect to a proposal submitted to the
Secretary for adoption of such addition or
modification.
``(C) Provision of expedited determination.--Under
the upgrade program and with respect to a proposal by a
standard setting organization for an addition or
modification to a standard adopted under section
1173(a), if the Secretary determines that the standard
setting organization developed such addition or
modification in accordance with the requirements of
subparagraph (D) and the National Committee on Vital
and Health Statistics recommends approval of such
addition or modification under subparagraph (E), the
Secretary shall provide for expedited treatment of such
proposal in accordance with subparagraph (F).
``(D) Requirements.--The requirements under this
subparagraph with respect to a proposed addition or
modification to a standard by a standard setting
organization are the following:
``(i) Request for publication of notice.--The
standard setting organization submits to the
Secretary a request for publication in the
Federal Register of a notice described in
subparagraph (B)(iii) for the proposed addition
or modification.
``(ii) Process for receipt and consideration
of public comment.--The standard setting
organization provides for a process through
which, after the publication of the notice
referred to under clause (i), the
organization--
``(I) receives and responds to public
comments submitted on a timely basis on
the proposed addition or modification
before submitting such proposed
addition or modification to the
National Committee on Vital and Health
Statistics under clause (iii);
``(II) makes publicly available a
written explanation for its response in
the proposed addition or modification
to comments submitted on a timely
basis; and
``(III) makes public comments
received under clause (I) available, or
provides access to such comments, to
the Secretary.
``(iii) Submittal of final proposed addition
or modification to ncvhs.--After completion of
the process under clause (ii), the standard
setting organization submits the proposed
addition or modification to the National
Committee on Vital and Health Statistics for
review and consideration under subparagraph
(E). Such submission shall include information
on the organization's compliance with the
notice and comment requirements (and responses
to those comments) under clause (ii).
``(E) Hearing and recommendations by national
committee on vital and health statistics.--Under the
upgrade program, upon receipt of a proposal submitted
by a standard setting organization under subparagraph
(D)(iii) for the adoption of an addition or
modification to a standard, the National Committee on
Vital and Health Statistics shall provide notice to the
public and a reasonable opportunity for public
testimony at a hearing on such addition or
modification. The Secretary may participate in such
hearing in such capacity (including presiding ex
officio) as the Secretary shall determine appropriate.
Not later than 90 days after the date of receipt of the
proposal, the Committee shall submit to the Secretary
its recommendation to adopt (or not adopt) the proposed
addition or modification.
``(F) Determination by secretary to accept or reject
national committee on vital and health statistics
recommendation.--
``(i) Timely determination.--Under the
upgrade program, if the National Committee on
Vital and Health Statistics submits to the
Secretary a recommendation under subparagraph
(E) to adopt a proposed addition or
modification, not later than 90 days after the
date of receipt of such recommendation the
Secretary shall make a determination to accept
or reject the recommendation and shall publish
notice of such determination in the Federal
Register not later than 30 days after the date
of the determination.
``(ii) Contents of notice.--If the
determination is to reject the recommendation,
such notice shall include the reasons for the
rejection. If the determination is to accept
the recommendation, as part of such notice the
Secretary shall promulgate the modified
standard (including the accepted proposed
addition or modification accepted).
``(iii) Limitation on consideration.--The
Secretary shall not consider a proposal under
this subparagraph unless the Secretary
determines that the requirements of
subparagraph (D) (including publication of
notice and opportunity for public comment) have
been met with respect to the proposal.
``(G) Exemption from paperwork reduction act.--
Chapter 35 of title 44, United States Code, shall not
apply to a final rule promulgated under subparagraph
(F).''.
SEC. 202. UPGRADING ASC X12 AND NCPDP STANDARDS.
The Secretary of Health and Human Services shall provide by notice
published in the Federal Register for the following replacements of
standards to apply to transactions occurring on or after April 1, 2009:
(1) Accredited standards committee x12 (asc x12) standard.--
The replacement of the Accredited Standards Committee X12 (ASC
X12) version 4010 adopted under section 1173(a) of such Act (42
U.S.C. 1320d-2(a)) with the ASC X12 version 5010, as reviewed
by the National Committee on Vital Health Statistics.
(2) National council for prescription drug programs (ncpdp)
telecommunications standards.--The replacement of the National
Council for Prescription Drug Programs (NCPDP)
Telecommunications Standards version 5.1 adopted under section
1173(a) of such Act (42 U.S.C. 1320d-2(a)) with whichever is
the latest version of the NCPDP Telecommunications Standards
that has been approved by such Council and reviewed by the
National Committee on Vital Health Statistics as of April 1,
2007.
SEC. 203. CODING AND DOCUMENTATION OF NON-MEDICAL INFORMATION.
In any regulation or other action implementing the International
Classification of Diseases, 10th revision, Clinical Modification (ICD-
10-CM), the International Classification of Diseases, 10th revision,
Procedure Coding System (ICD-10-PCS), or other version of the
International Classification of Diseases, 10th revision, the Secretary
of Health and Human Services shall ensure that no health care provider
is required to code to a level of specificity that would require
documentation of non-medical information on the external cause of any
given type of injury.
TITLE III--PROMOTING THE USE OF HEALTH INFORMATION TECHNOLOGY TO BETTER
COORDINATE HEALTH CARE
SEC. 301. SAFE HARBORS TO ANTIKICKBACK CIVIL PENALTIES AND CRIMINAL
PENALTIES FOR PROVISION OF HEALTH INFORMATION
TECHNOLOGY AND TRAINING SERVICES.
(a) For Civil Penalties.--Section 1128A of the Social Security Act
(42 U.S.C. 1320a-7a) is amended--
(1) in subsection (b), by adding at the end the following new
paragraph:
``(4) For purposes of this subsection, inducements to reduce or limit
services described in paragraph (1) shall not include the practical or
other advantages resulting from health information technology or
related installation, maintenance, support, or training services.'';
and
(2) in subsection (i), by adding at the end the following new
paragraph:
``(8) The term `health information technology' means
hardware, software, license, right, intellectual property,
equipment, or other information technology (including new
versions, upgrades, and connectivity) designed primarily for
the electronic creation, maintenance, or exchange of health
information to better coordinate care or improve health care
quality, efficiency, or research.''.
(b) For Criminal Penalties.--Section 1128B(b)(3) of such Act (42
U.S.C. 1320a-7b(b)(3)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in the subparagraph (H) added by section 237(d) of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173; 117 Stat. 2213)--
(A) by moving such subparagraph 2 ems to the left;
and
(B) by striking the period at the end and inserting a
semicolon;
(3) in the subparagraph (H) added by section 431(a) of such
Act (117 Stat. 2287)--
(A) by redesignating such subparagraph as
subparagraph (I);
(B) by moving such subparagraph 2 ems to the left;
and
(C) by striking the period at the end and inserting
``; and''; and
(4) by adding at the end the following new subparagraph:
``(J) any nonmonetary remuneration (in the form of health
information technology, as defined in section 1128A(i)(8), or
related installation, maintenance, support or training
services) made to a person by an entity that is a hospital,
group practice, prescription drug plan sponsor, or Medicare
Advantage organization if--
``(i) the provision of such remuneration is without
an agreement between the parties or legal condition
that--
``(I) limits or restricts the use of the
health information technology to services
provided by the physician to individuals
receiving services at the entity;
``(II) limits or restricts the use of the
health information technology in conjunction
with other health information technology; or
``(III) conditions the provision of such
remuneration on the referral of patients or
business to the entity;
``(ii) such remuneration is arranged for in a written
agreement that is signed by the parties involved (or
their representatives) and that specifies the
remuneration solicited or received (or offered or paid)
and states that the provision of such remuneration is
made for the primary purpose of better coordination of
care or improvement of health quality, efficiency, or
research; and
``(iii) the entity providing the remuneration (or a
representative of such entity) has not taken any action
to disable any basic feature of any hardware or
software component of such remuneration that would
permit interoperability.''.
(c) Effective Date and Effect on State Laws.--
(1) Effective date.--The amendments made by subsections (a)
and (b) shall take effect on the date that is 120 days after
the date of the enactment of this Act.
(2) Preemption of state laws.--No State (as defined in
section 1101(a) of the Social Security Act (42 U.S.C. 1301(a))
for purposes of title XI of such Act) shall have in effect a
State law that imposes a criminal or civil penalty for a
transaction described in section 1128A(b)(4) or section
1128B(b)(3)(J) of such Act, as added by subsections (a)(1) and
(b), respectively, if the conditions described in the
respective provision, with respect to such transaction, are
met.
(d) Study and Report to Assess Effect of Safe Harbors on Health
System.--
(1) In general.--The Inspector General of the Department of
Health and Human Services shall conduct a study to determine
the impact of each of the safe harbors described in paragraph
(3). In particular, the study shall examine the following:
(A) The effectiveness of each safe harbor in
increasing the adoption of health information
technology.
(B) The types of health information technology
provided under each safe harbor.
(C) The extent to which the financial or other
business relationships between providers under each
safe harbor have changed as a result of the safe harbor
in a way that adversely affects or benefits the health
care system or choices available to consumers.
(D) The impact of the adoption of health information
technology on health care quality, cost, and access
under each safe harbor.
(2) Report.--Not later than three years after the effective
date described in subsection (c)(1), the Secretary of Health
and Human Services shall submit to Congress a report on the
study under paragraph (1).
(3) Safe harbors described.--For purposes of paragraphs (1)
and (2), the safe harbors described in this paragraph are--
(A) the safe harbor under section 1128A(b)(4) of such
Act (42 U.S.C. 1320a-7a(b)(4)), as added by subsection
(a)(1); and
(B) the safe harbor under section 1128B(b)(3)(J) of
such Act (42 U.S.C. 1320a-7b(b)(3)(J)), as added by
subsection (b).
SEC. 302. EXCEPTION TO LIMITATION ON CERTAIN PHYSICIAN REFERRALS (UNDER
STARK) FOR PROVISION OF HEALTH INFORMATION
TECHNOLOGY AND TRAINING SERVICES TO HEALTH CARE
PROFESSIONALS.
(a) In General.--Section 1877(b) of the Social Security Act (42
U.S.C. 1395nn(b)) is amended by adding at the end the following new
paragraph:
``(6) Information technology and training services.--
``(A) In general.--Any nonmonetary remuneration (in
the form of health information technology or related
installation, maintenance, support or training
services) made by an entity that is a hospital, group
practice, prescription drug plan sponsor, or a Medicare
Advantage organization to a physician if--
``(i) the provision of such remuneration is
without an agreement between the parties or
legal condition that--
``(I) limits or restricts the use of
the health information technology to
services provided by the physician to
individuals receiving services at the
entity;
``(II) limits or restricts the use of
the health information technology in
conjunction with other health
information technology; or
``(III) conditions the provision of
such remuneration on the referral of
patients or business to the entity;
``(ii) such remuneration is arranged for in a
written agreement that is signed by the parties
involved (or their representatives) and that
specifies the remuneration made and states that
the provision of such remuneration is made for
the primary purpose of better coordination of
care or improvement of health quality,
efficiency, or research; and
``(iii) the entity (or a representative of
such entity) has not taken any action to
disable any basic feature of any hardware or
software component of such remuneration that
would permit interoperability.
``(B) Health information technology defined.--For
purposes of subparagraph (A), the term `health
information technology' means hardware, software,
license, right, intellectual property, equipment, or
other information technology (including new versions,
upgrades, and connectivity) designed primarily for the
electronic creation, maintenance, or exchange of health
information to better coordinate care or improve health
care quality, efficiency, or research.''.
(b) Effective Date and Effect on State Laws.--
(1) Effective date.--The amendment made by subsection (a)
shall take effect on the date that is 120 days after the date
of the enactment of this Act.
(2) Preemption of state laws.--No State (as defined in
section 1101(a) of the Social Security Act (42 U.S.C. 1301(a))
for purposes of title XI of such Act) shall have in effect a
State law that imposes a criminal or civil penalty for a
transaction described in section 1877(b)(6) of such Act, as
added by subsection (a), if the conditions described in such
section, with respect to such transaction, are met.
(c) Study and Report to Assess Effect of Exception on Health
System.--
(1) In general.--The Inspector General of the Department of
Health and Human Services shall conduct a study to determine
the impact of the exception under section 1877(b)(6) of such
Act (42 U.S.C. 1395nn(b)(6)), as added by subsection (a). In
particular, the study shall examine the following:
(A) The effectiveness of the exception in increasing
the adoption of health information technology.
(B) The types of health information technology
provided under the exception.
(C) The extent to which the financial or other
business relationships between providers under the
exception have changed as a result of the exception in
a way that adversely affects or benefits the health
care system or choices available to consumers.
(D) The impact of the adoption of health information
technology on health care quality, cost, and access
under the exception.
(2) Report.--Not later than three years after the effective
date described in subsection (b)(1), the Secretary of Health
and Human Services shall submit to Congress a report on the
study under paragraph (1).
Amend the title so as to read:
A bill to promote a better health information system.
Purpose and Summary
The purpose of H.R. 4157, ``Better Health Information
System Act of 2006,'' is to promote a better health information
system. Broad use of information technology throughout the
health care system is essential to improve the quality and
efficiency of health care delivery. Adoption of health
information technology (health IT) is increasingly necessary to
deliver state-of-the-art care to individuals with chronic
illness and to promote interoperability between providers, both
private and public, and payers. Efficiencies gained by the
coordinated development of health IT will accelerate and
advance private and public efforts to improve quality, lower
costs, reduce fraud and abuse, and promote the coordination of
care to achieve better health outcomes.
Title I codifies and expands the authorities and duties of
the National Coordinator for Health Information Technology
(National Coordinator) at the Department of Health and Human
Services (HHS). This includes a number of responsibilities such
as endorsing interoperability guidelines under a schedule,
conducting a National survey on the information exchange
capabilities of certain entities, and reviewing Federal
information systems and security practices. Title I requires
that certain Federal health information collection systems be
capable of receiving information in a form consistent with any
guidelines endorsed by the National Coordinator within three
years of endorsement. Title I also provides that the President
take steps to promote the use of nonidentifiable electronic
health information for health and health care research. In
addition, Title I provides for a report on the work conducted
by the American Health Information Community (Community) and
its role in the future as well as a report on financing
incentives. In addition, Title I provides grants to help
integrated health systems relay health information and better
coordinate the delivery of care for uninsured, underinsured and
medically underserved populations. Finally, Title I contains a
demonstration program to promote adoption of health IT in the
small physician setting.
Title II makes revisions to Section 1173 of the Social
Security Act and streamlines the process for updating additions
and modifications to the Health Insurance Portability and
Accountability Act (HIPPA) electronic financial and
administrative healthcare transaction standards. Title II also
sets deadlines for upgrading certain other electronic
transaction standards. The bill as reported doesn't maintain
provisions which would have mandated by 2009 a transition from
the current 9th version of the International Classification of
Diseases (ICD-9) to the 10th version for diseases and
procedures (ICD-10 CM and ICD-10-PCS) for purposes of billing
and transactions that were originally in H.R. 4157 as
introduced. Upon adoption of the 10th version, however, the
bill as reported prohibits requiring providers to code to a
level of specificity that necessitates documentation of non-
medical external causes of injury.
Lastly, Title III creates safe harbors for providing
certain health IT or related services under both Section 1128B
of the Social Security Act (anti-kickback law) and Section 1877
of the Social Security Act (the physician referral law),
contingent on a number of conditions in such safe harbors.
Background and Need for Legislation
Today's health IT provides substantial opportunity to
improve health and health care. At the simplest level, an e-
mail with attachments transmitted through a broadband
connection increases the speed of exchanging health information
among providers. Much larger advantages come from placing
health information into formats which allow software to sort or
aggregate such information for multiple purposes. These
purposes include greater data sharing, intelligent support to
physicians for patient care, remote patient monitoring, use of
nonidentifiable patient information for studies, quality
measure reporting, pricing transparency, bio-surveillance, and
provision of personal health records to involve patients in
their own care.
Changing the way health records are created, stored,
maintained, and transferred across the health care industry is
not easy. Many observers, however, believe adoption of more
sophisticated health IT and practices has been slower than has
occurred in other industries. Moreover, greater functionality
of electronic health information systems depends on integration
in a manner that allows for the interoperable exchange of such
information.
The primary engine for advancing a better health
information system is and will continue to be the private
sector. Software and technology vendors are making products
with increasing value and function. Participants in the health
care industry are improving quality of care and efficiency by
adopting new technologies, which provide a good return on
investments.
The policies and programs in the Better Health Information
System Act of 2006 are by no means exhaustive. Moreover, the
legislation reflects a subset of efforts already underway
through the leadership of the President, the Secretary of HHS,
and others.
CERTAIN INITIATIVES AT THE DEPARTMENT OF HEALTH AND HUMAN SERVICES
On April 27, 2004, the President signed Executive Order
13335 (EO) announcing his commitment to the promotion of health
IT to lower costs, reduce medical errors, improve quality of
care, and provide better information for patients and
physicians. In particular, the President called for widespread
adoption of electronic health records (EHRs) within 10 years so
that health information will follow patients throughout their
care in a seamless and secure manner. Toward that vision, the
EO directed the Secretary of HHS to establish within the Office
of the Secretary the position of National Coordinator for
Health Information Technology (National Coordinator) with
responsibilities for coordinating Federal health IT programs
with those of relevant executive branch agencies as well as
coordinating with the private sector on their health IT
efforts.
On July 21, 2004, during the Department's Health IT Summit,
the Administration published the ``Strategic Framework: The
Decade of Health Information Technology: Delivering Consumer-
centric and Information-rich Health Care'' (The Framework). The
Framework outlined an approach toward nationwide implementation
of interoperable EHRs and identified four major goals. These
goals are: (1) inform clinical practice by accelerating the use
of EHRs; (2) interconnect clinicians so that they can exchange
health information using advanced and secure electronic
communication; (3) personalize care with consumer-based health
records and better information for consumers; and (4) improve
public health through advanced bio-surveillance methods and
streamlined collection of data for quality measurement and
research.
On July 14, 2005, Secretary Leavitt formally announced the
formation of a national collaboration, the American Health
Information Community (the Community), a public-private body
formed pursuant to the Federal Advisory Committee Act to help
transition the Nation to EHRs in a smooth, market-led way. The
Community will provide input and recommendations to the
Secretary on the use of common standards and on achievement of
interoperability among EHRs while assuring that the privacy and
security of those records are protected.
HHS is providing contracts in a number of areas. Those
include a process to harmonize and make refinements to industry
wide standards; create a process to specify criteria for
certain EHR products; development of models for health
information exchange; and evaluation of variation of State laws
around privacy and security that may pose challenges for health
information exchange.
HHS is doing a number of things to assist in the
development of a national interoperable health IT
infrastructure including: evaluation of health care providers
in small practices to determine their EHR adoption rates;
setting standards to support electronic prescriptions for
Medicare; and proposing exceptions to the physician self
referral and anti kickback statutes.
The bill reported out of Committee is intended to enhance
these efforts.
INTEROPERABILITY
The Commission on Systemic Interoperability, authorized by
the MMA, held its first meeting on January 10, 2005.
Interoperability focuses on the need for healthcare information
to be connected so information is accessible whenever and
wherever it is needed and authorized. Interoperability issues
often become exceedingly technical, focusing on the rules for
how information is created, stored, and moved among computer
systems. The Commission recommended among other items that HHS,
advised by the American Health Information Community (AHIC) and
in consultation with the National Committee for Vital and
Health Statistics (NCVHS), should ensure broad acceptance,
effective implementation, and ongoing maintenance of a complete
set of interoperable, non-overlapping data standards that
function to assure data in one part of the health system, when
authorized, is available and meaningful across the complete
range of clinical, administrative, payment system, public
health, and research settings. Additionally, AHIC should build
upon HIPAA to develop national standards for authentication,
authorization, and security that will permit the necessary
infrastructure for consumers' confident adoption of health IT.
Standardizing data at the point of its creation will accelerate
greatly the creation of an interoperable healthcare information
network. HHS should work with manufacturers of drugs, devices,
and test kits to achieve standardized identifiers and
vocabulary in labels and packaging as well as in all data
outputs of devices and test kits.
The bill as reported provides for (1) the National
Coordinator to develop a schedule for the endorsement of
guidelines for interoperability for significant use cases which
may include the exchange of laboratory data, drug prescribing
data, clinical research and electronic health records; (2) the
National Coordinator to endorse interoperability guidelines
under a schedule it develops on a yearly basis but consistent
with the schedule; (2) conduct of a national survey on the
information exchange capabilities of certain entities; and (3)
a review of Federal information systems and security practices.
Title I also requires that certain Federal health information
collection systems be capable of receiving information in a
form consistent with any guidelines endorsed by the National
Coordinator within three years of endorsement.
The Committee believes issues surrounding interoperability
can be very complicated. Moreover, there is no single clear
definition of interoperability. It is important that the
endorsements and requirements on Federal information collection
systems be practical, not pose unnecessary administrative or
cost burdens, and not disrupt or take away from the delivery of
health care. Interoperability can be achieved on systems in
many ways, including through the addition of software that
converts information to a more interoperable format.
Accordingly, measuring interoperability at the point of
purchasing or donating products may not be pragmatic. A device
or software can be placed into one information system in a
manner that operates to meet interoperability guidelines. Yet,
the same device or software can be placed into another system
that may not meet interoperability guidelines. The Committee
believes the National Coordinator and others will need to
address the complexity of these issues in an ongoing process
and that policies related to interoperability guidelines will
need to be considered carefully.
INCENTIVES
Generally, health information technology and related
expenses qualify as business expenses that could either be
depreciated or deducted under Federal tax laws.
There are some existing Federal programs and initiatives
underway to provide funding and other assistance for the
adoption of health IT. Some of these initiatives include:
Medicaid Transformation Grants within the Deficit Reduction
Act of 2005 (Public Law 109-171) provide for payments to States
for the adoption of innovative methods to improve the
effectiveness and efficiency in providing medical assistance
under Medicaid. These include methods for reducing patient
error rates through the implementation and use of EHRs,
electronic clinical decision support tools and e-prescribing
programs. These grants were funded at $75 million in each of
fiscal years 2007 and 2008.
The MMA authorizes the Secretary of HHS to make grants to
assist physicians in implementing electronic prescription drug
programs. The MMA also established a Medicare Care Management
Performance Demonstration which provides payment to each
physician who exceeds quality and outcome measures and who uses
health IT to manage care. $500 million was authorized for
fiscal year 2007 and such sums as may be necessary for each of
fiscal years 2008 and 2009. The MMA also extends for four
years, and increases funding to $60 million, a telemedicine
demonstration project that involves health care provider
telemedicine networks that use high-capacity computer systems
and medical informatics to improve primary care and prevent
health complications in Medicare beneficiaries with diabetes.
Within the Agency for Healthcare Research and Quality
(AHRQ), there are numerous initiatives involving funding for
health IT. AHRQ's $166 million in health IT investments support
diffusion of health IT to 41 States. Many AHRQ health IT
projects also receive funding from private charitable
foundations, local communities, and State governments. They
have awarded over 100 three-year grants that focus on specific
applications of health IT to problem areas in healthcare
delivery. They have also awarded six 5-year State contracts to
support the development of statewide health information
exchange (HIE). Additionally, AHRQ's National Resource Center
for Health IT (NRC) has invested over $20 million over 5 years
in nationwide resource and assistance for organizations
implementing health IT and has provided access to national
experts with experience in health IT implementation.
The Centers for Medicare and Medicaid Services (CMS) is
providing technical assistance to physician offices on how to
adopt health IT tools to improve quality through the Doctor's
Office Quality Information Technology (DOQ-IT) project.
Additionally, the President's fiscal year 2007 budget request
includes $169 million, an increase of $58million over fiscal
year 2006, to continue efforts toward achieving the President's goal
for most Americans to have electronic health records by 2014.
The bill as reported adds to these incentives. Title I
provides $30 million in grants over two years to help
integrated health systems relay health information and better
coordinate the delivery of care for uninsured, underinsured and
medically underserved populations. Title I also contains a
demonstration program to promote adoption of health IT in the
small physician setting through a $10 million grant over two
years. Importantly, as discussed below, Title III removes
barriers to economically viable arrangements to better
coordinate care through the use of information technology. This
will increase adoption and improve return on investment for
such expenditures.
SAFE HARBORS
Section 1128B(b) of the Social Security Act (the anti-
kickback statute) provides criminal penalties for individuals
or entities that knowingly and willfully offer, pay, solicit,
or receive remuneration in order to induce or reward the
referral of business reimbursable under any of the Federal
health care programs, as defined in Section 1128B(f) of the
Act. The offense is classified as a felony and is punishable by
fines of up to $25,000 and imprisonment for up to five years.
Violations of the anti-kickback statute may also result in the
imposition of civil money penalties. As a result of the
statute's broad reach, however, concern was expressed that some
relatively innocuous commercial arrangements were covered by
the statute and, therefore, potentially subject to criminal
prosecution. In response, Congress required the development and
promulgation of regulations, the so-called ``safe harbor''
provisions, that would specify various payment and business
practices that would not be treated as criminal offenses under
the anti-kickback statute. Since July 29, 1991, the HHS Office
of Inspector General (OIG) has published a series of final
regulations establishing ``safe harbors'' in various areas.
Section 1877 of the Social Security Act (the physician
self-referral law): (1) prohibits a physician from making
referrals for certain designated health services (DHS) payable
by Medicare to an entity with which he or she (or an immediate
family member) has a financial relationship (ownership interest
or compensation arrangement), unless an exception applies; and
(2) prohibits the entity from submitting claims to Medicare for
those referred services, unless an exception applies. The
statute establishes a number of exceptions and grants the
Secretary of HHS authority to create additional regulatory
exceptions for financial relationships that do not pose a risk
of program or patient abuse.
Section 101 of the MMA added a new Section 1860D to the
Social Security Act establishing a prescription drug benefit in
the Medicare program. As part of the new legislation, Congress
directed the Secretary to adopt standards for electronic
prescribing with the objective of improving patient safety,
quality of care, and efficiency in the delivery of care. The
MMA directs the Secretary, in consultation with the Attorney
General, to create an exception to the physician self-referral
prohibition and a safe harbor under the anti-kickback statute
to protect certain arrangements involving the provision of non-
monetary remuneration (consisting of items and services in the
form of hardware, software, or information technology and
training services) that is necessary and used solely to receive
and transmit electronic prescription drug information in
accordance with electronic prescribing standards published by
the Secretary.
Fear of self-referral and anti-kickback laws often stands
in the way of diffusion and use of health information
technology and better coordination of care. Today, nothing
prevents a physician from purchasing his own system under his
own license, performing his own maintenance, or conducting his
own training and upkeep. Yet obtaining these items through a
proven system in a hospital or from another health care entity
can reduce risk and allow for economies of scale. One of the
most significant risks to a physician's office is an unproven
and unused system. Connecting to an existing system can reduce
this risk premium.
There are numerous reasons for a health care entity to
provide software, training, licensing agreements, etc. that do
not involve an agreement for referrals. First, connecting
providers creates faster and cheaper information flow between
parties. Second, such information flow improves coordination of
care which leads to better follow-up care for patients. This
translates into improved outcomes and less complication. Third,
better outcomes reduce liability expenses for health care
entities such as hospitals. Fourth, better coordination of care
means less duplicative tests and procedures.
EHRs can not only aggregate data but also keep track
through an audit trail of each time a record has been accessed,
who opened the record, and what data was entered. This should
be a valuable tool for identifying fraud including kickbacks
and fraud during billing. Just the fact that an EHR can perform
this function will be a deterrent. Moreover, fraud can be
detected and reduced through a variety of information
technology capabilities, including abnormal pattern
recognition, powerful system audits, practice pattern
monitoring, and tracking of controlled substances.
Title III provides for limited safe harbors for hospitals,
group practices, prescription drug plan sponsors, and Medicare
Advantage organizations providing certain health information
technology or related services under both Section 1128B of the
Social Security Act (the anti- kickback statute) and Section
1877 of the Social Security Act (the physician self-referral
law). These have been crafted with the above considerations in
mind. However, the Committee does not support agreements
between parties that are conditioned on referrals.
PRIVACY AND SECURITY
H.R. 4157 as introduced would provide for a study regarding
Federal and State privacy and security standards and a new
preemption scheme that would fully preempt State standards
within a certain timeframe. The purpose of this provision was
to reduce barriers to an interstate electronic health
information system. Several parties objected to such a change.
Other parties have argued for additional and substantial
changes to the current Federal privacy rules. HHS is currently
assessing variations in State laws and organization level
business policies aroundprivacy and security practices,
including variations in implementation of HIPAA privacy and security
requirements that may pose challenges to automated health information
exchange and interoperability.
The bill reported out of Committee preserves the existing
Federal-State relationship and does not rewrite the current
privacy rules. As discussed below, these rules are the product
of a great deal of process and debate and are very extensive in
nature. Several privacy and security laws are currently under
review by the Committee.
HIPAA Sections 261 through 264 requires the Secretary of
HHS to publicize standards for the electronic exchange,
privacy, and security of health information. Collectively,
these are known as the Administrative Simplification
provisions. HIPAA Section 264 provides that if Congress fails
to enact legislation governing the privacy of individually
identifiable health information within 3 years (of 1996), HHS
is to promulgate regulations containing such standards. Section
264 of HIPAA also provides that such regulations do not preempt
contrary state law if the provision of state law imposes
requirements, standards, or implementation specifications that
are more stringent than those imposed by the federal
regulations.
Because Congress was unable to enact health privacy
legislation within the 3-year deadline, HHS developed proposed
Standards for Privacy of Individually Identifiable Health
Information, known as the ``Privacy Rule,'' and released it for
public comment on November 3, 1999. The Department received
over 52,000 public comments. The final Privacy Rule (described
below) was published December 28, 2000. In March 2002, the
Department proposed and released for public comment
modifications to the Privacy Rule. The Department received over
11,000 comments. The final modifications were published in
final form on August 14, 2002.
The Privacy Rule establishes a set of national standards
for the protection of certain health information. The Privacy
Rule standards address the use and disclosure of individually
identifiable health information (protected health information)
by organizations directly subject to the rule called ``covered
entities.'' These include most healthcare providers, health
plans, and health care clearinghouses. Other groups called
``business associates'' of a covered entity may need to follow
certain contractual requirements as required by HIPAA but are
not themselves subject to the same enforcement authorities
under HIPAA. The Rule also sets standards governing an
individuals' privacy rights to understand and control how their
health information is used. Within HHS, the Office for Civil
Rights (OC) has responsibility for implementing and enforcing
the Privacy Rule with respect to voluntary compliance
activities and civil money penalties.
A covered entity is permitted to use and disclose protected
health information fairly freely without an individual's
authorization to the individual and for treatment, payment, and
health care operations. In addition, no authorization is needed
for disclosing health information for ``public interest''
purposes (including, but not limited to, research, public
health, law enforcement and disclosures required by law) so
long as the covered entity meets the specific requirements
imposed by the Rule.
For a number of purposes, (such as including information in
facility directories and dealing with family and friends
involved in a patient's care) a covered entity may use and
disclose protected health information without an individual's
written authorization so long as they give the individual the
opportunity to object.
A central aspect of the Privacy Rule is the principle of
``minimum necessary''. A covered entity must develop and
implement policies and procedures to reasonably limit uses and
disclosures of protected health information to the minimum
necessary needed to accomplish the intended purpose of the use,
disclosure, or request. A key exception to the minimum
necessary rule is made for treatment: the minimum necessary
rule does not apply when a provider asks for or discloses
health information for treatment purposes.
A covered entity must develop and implement written privacy
policies and procedures that are consistent with the Privacy
Rule. A covered entity must designate a privacy official
responsible for developing and implementing its privacy
policies and procedures as well as a contact person or contact
office responsible for receiving complaints and providing
individuals with information on the covered entity's privacy
practices. A covered entity must train all workforce members on
its privacy policies and procedures as necessary and
appropriate for them to carry out their functions. A covered
entity must have and apply appropriate sanctions against
workforce members who violate its privacy policies and
procedures or the Privacy Rule. Also, a covered entity must
mitigate, to the extent practicable, any harmful effect it
learns was caused by use or disclosure of protected health
information by its workforce or its business associates in
violation of its privacy policies and procedures or the Privacy
Rule.
A covered entity must maintain reasonable and appropriate
administrative, technical, and physical safeguards to prevent
intentional or unintentional use or disclosure of protected
health information in violation of the Privacy Rule and to
limit its incidental use and disclosure pursuant to otherwise
permitted or required use or disclosure. For example, such
safeguards could include shredding documents containing
protected health information before discarding them, securing
medical records with lock and key or pass-code, and limiting
access to keys or pass codes.
The HIPAA Privacy Rule preempts provisions of state law
that are contrary to the Federal standard. In accordance with
Section 264 of HIPAA, the Privacy Rule provides exceptions from
this preemption for contrary State laws that: (1) relate to the
privacy of individually identifiable health information and
provide greater privacy protections or privacy rights with
respect to such information; (2) provide for the reporting of
disease or injury, child abuse, birth or death, or for public
health surveillance, investigation, or intervention; or (3)
require certain health plan reporting such as for management or
financial audits.
The final rule adopting HIPAA standards for security was
published in the Federal Register on February 20, 2003. This
final rule specifies a series of administrative, technical, and
physical security procedures for covered entities to assure the
confidentiality of electronic protected health information. The
security standards define administrative, physical,
andtechnical safeguards to protect the confidentiality, integrity, and
availability of electronic protected health information. The standards
require covered entities to implement basic safeguards to protect
electronic protected health information from unauthorized access,
alteration, deletion, and transmission.
HHS may impose civil money penalties on a covered entity of
$100 per failure to comply with a requirement. That penalty may
not exceed $25,000 per year for multiple violations of the same
Privacy Rule requirement in a calendar year. A person who
knowingly obtains or discloses individually identifiable health
information in violation of HIPAA faces a fine of $50,000 and
up to one year in prison. The criminal penalties increase to
$100,000 and up to five years imprisonment if the wrongful
conduct involves false pretenses and to $250,000 and up to ten
years imprisonment if the wrongful conduct involves the intent
to sell, transfer, or use individually identifiable health
information for commercial advantage, personal gain, or
malicious harm. The United States Department of Justice, the
department responsible for criminal enforcement of the Privacy
Rule, has taken the position that these criminal penalties may
only be applied to the ``covered entity'' and may not be
imposed on employees or certain others.
The Privacy Act of 1974, as amended at 5 U.S.C. 552a,
applies to Federal agencies and protects records that can be
retrieved by personal identifiers such as a name, social
security number, or other identifying number or symbol. The
Privacy Act prohibits disclosure of these records without
individual written consent unless one of the twelve disclosure
exceptions enumerated in the Act applies. These records are
held in Privacy Act systems of records, and a notice of any
such system is published in the Federal Register. These notices
identify the legal authority for collecting and storing the
records, a description of whose records will be collected, the
type of information to be collected, and how such records will
be used.
The bill reported out of Committee maintains all of the
above protections while preserving the existing Federal-State
relationships among laws. Regulations must balance the need to
get the right information at the right time with privacy and
security concerns. This will be a subject of ongoing review for
the Committee. Title I does provide a role for the National
Coordinator in assisting other Federal Departments and agencies
in security issues.
Hearings
On March 16, 2006, the Subcommittee on Health held a
hearing entitled ``Legislative Proposals to Promote Electronic
Health Records and a Smarter Health Information System.'' The
Subcommittee received testimony from: Mr. Ivo Nelson,
Healthcare Industry Leader, Global Americas, IBM; Dr. William
Braithwaite, MD, PhD, Chief Clinical Officer, eHealth
Initiative and Foundation for eHealth Initiative; Mr. Alan
Mertz, President, American Clinical Laboratory Association; Mr.
Bill Vaughan, Senior Policy Analyst, Consumers Union; Mr. Mark
Neaman, President and CEO, Evanston Northwestern Healthcare;
Mr. James Pyles, Attorney Member, Powers, Pyles, Sutter, and
Verville, P.C.; and Dr. Don Detmer; President and CEO, American
Medical Informatics Association.
Committee Consideration
On Thursday, June 8, 2006, the Subcommittee on Health met
in open markup session and approved H.R. 4157 for Full
Committee consideration, amended, by a voice vote, a quorum
being present.
On Thursday, June 15, 2006, the Full Committee met in open
markup session and ordered H.R. 4157 favorably reported to the
House, amended, by a record vote of 28 yeas and 14 nays, a
quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
following are the recorded votes taken on amendments offered to
the measure, including the names of those Members voting for
and against. A motion by Mr. Barton to order H.R. 4157 reported
to the House, amended, was agreed to by a record vote of 28
yeas and 14 nays.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held an oversight
hearing and made findings that are reflected in this report.
Statement of General Performance Goals and Objectives
The purpose of H.R. 4157, the Better Health Information
System Act of 2006, is to provide for a better health
information system.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
4157, the Better Health Information System Act of 2006, would
result in no new or increased budget authority, entitlement
authority, or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 5, 2006.
Hon. Joe Barton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4157, the Better
Health Information System Act of 2006.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley.
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure.
H.R. 4157--Better Health Information System Act of 2006
Summary: CBO estimates that implementing H.R. 4157 would
cost $4 million in 2007 and $38 million over the 2007-2011
period, assuming appropriation of the authorized amounts.
Enacting the bill would have no effect on direct spending or
revenues.
H.R. 4157 would amend the Public Health Service Act (PHSA)
to codify the establishment and responsibilities of the Office
of the National Coordinator for Health Information Technology.
The bill also would require the Secretary to conduct several
studies on programs to promote the development and adoption of
health information technology, and would authorize the
appropriation of $20 million a year for 2007 and 2008 for
grants to facilitate the adoption of certain health information
technology.
In addition, H.R. 4157 would modify the Social Security Act
to:
Specify procedures for adopting updated
standards for the electronic exchange of health data,
and require that certain updated standards be
implemented in 2009; and
Establish ``safe harbors'' for donations of
health information technology that might otherwise be
subject to civil monetary penalties, criminal
penalties, or sanctions for violating the prohibitions
on certain physician referrals.
H.R. 4157 would preempt, in some circumstances, state laws
that govern record-keeping requirements and that establish
civil or criminal penalties for the exchange of health
information technology. Because those preemptions would limit
the application of state laws, they would be intergovernmental
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
CBO estimates, however, that the costs of the mandates to
states would be small and, thus, would not exceed the threshold
established in UMRA ($64 million in 2006, adjusted annually for
inflation).
The bill would impose a private-sector mandate on health
plans, providers, and clearing houses by requiring them to
adopt updated standards for claims transactions by 2009. CBO
assumes that this deadline would be met under current law,
however, so the mandate would impose no additional cost on
those private-sector entities.
Estimated cost to the Federal Government: The estimated
cost of H.R. 4157 is shown in the following table. The costs of
this legislation fall within budget function 550 (health).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------
2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization level........................................... 20 20 0 0 0
Estimated outlays............................................. 4 14 14 5 1
----------------------------------------------------------------------------------------------------------------
Basis of estimate
On April 27, 2004, the President issued Executive Order
13335, which established within the Office of the Secretary of
Health and Human Services (HHS) the position of National Health
Information Technology Coordinator. The Secretary subsequently
established the Office of the National Coordinator of Health
Information Technology (ONCHIT) to support the adoption of
interoperable health information technology. Funding for ONCHIT
totaled $62 million for 2006: $43 million was appropriated to
ONCHIT, and $19 million was reprogrammed from other activities.
The President requested $116 million for ONCHIT for 2007.
H.R. 4157 would amend the Public Health Service Act to
codify the establishment and responsibilities of the Office of
the National Coordinator for Health Information Technology,
specify procedures for adopting updated standards for the
electronic exchange of health data, and establish safe harbors
for donations of health information technology.
For this estimate, CBO assumes that H.R. 4157 will be
enacted near the end of fiscal year 2006, that the authorized
amounts will be appropriated each year, and that outlays will
follow historical patterns for similar activities of the
Department of Health and Human Services.
Health Information Technology and Quality
The National Coordinator for Health Information Technology
serves as the senior advisor to the Secretary of HHS and the
President on all health information technology programs and
initiatives, and is responsible for:
Developing and maintaining a strategic plan
to guide the nationwide implementation of electronic
health records in both the public and private health
care sectors;
Coordinating spending by federal agencies
for health information technology programs and
initiatives; and
Coordinating outreach activities to the
private sector on health information technology
matters.
H.R. 4157 would codify the establishment and
responsibilities of the Office of the National Coordinator for
Health Information Technology. The bill would require the
Secretary of HHS to prepare reports on certain activities
initiated pursuant to the Executive Order to promote the
development of a nationwide health information network and on
issues related to the development, operation, and
implementation of state, regional, and community organizations
that share and coordinate the deployment and use of health
information technology (so-called health information
exchanges). CBO estimates that implementing those provisions
would not change the cost of ONCHIT's activities.
The bill also would authorize the appropriation of $15
million a year for 2007 and 2008 for grants to integrated
health systems to promote the adoption and use of health
information technology for the purpose of improving
coordination of care for uninsured and underserved populations.
In addition, it would authorize the appropriation of $5 million
a year for 2007 and 2008 for grants to small physician
practices located in rural or medically underserved areas for
the purchase and support of health information technology.
Based on spending patterns for similar programs that provide
grants to health care providers, CBO estimates that
implementing those grant programs would cost $4 million in 2007
and $38 million over the 2007-2011 period, assuming
appropriation of the specified amounts.
Standards for the Electronic Exchange of Health Data
H.R. 4157 would require the Secretary of HHS to establish
expedited procedures for adopting updates to standards that
enable the electronic exchange of health data. The bill also
would require that two sets of standards apply to certain
health information transactions by April 1, 2009: the ``X12''
standards developed by the Accredited Standards Committee for
electronic data interchange, and the updated telecommunication
standards adopted by the National Council for Prescription Drug
Programs. CBO estimates that implementing those provisions
would not have a significant effect on federal spending.
Safe Harbors for Donations of Health Information Technology
H.R. 4157 would establish ``safe harbors'' for donations of
health information technology that might otherwise be subject
to civil monetary penalties, criminal penalties, or sanctions
for violating the prohibitions on certain physician referrals.
The bill would permit certain entities (hospitals, group
practices, Medicare Advantage plans, and prescription drug
plans) to donate health information technology (hardware;
software; or related maintenance, support, or training
services) to physicians.
The Administration has identified the current application
of those penalties and sanctions as an impediment to the
success of efforts to promote the widespread adoption of
interoperable health information technology. Accordingly, the
HHS Office of the Inspector General and the Centers for
Medicare & Medicaid Services, under authority existing in
current law, are engaged in a rule-making process to establish
safe harbors for donations of health information technology
that would balance enforcement of program-integrity rules with
promotion of the adoption of interoperable health information
technology. In the preliminary stage of the rule-making
process, those offices described a framework that would limit:
Entities eligible for the safe harbor (a
hospital may donate to members of its medical staff; a
group practice may donate to physicians who are members
of the group practice; and Medicare Advantage plans and
prescription drug plans may donate to their prescribing
physicians), and
Eligible donations (software and related
training).
CBO anticipates that the final rules will establish a set
of eligible entities and donations similar to those specified
in the bill. Therefore, CBO estimates that enacting the safe-
harbor provisions in H.R. 4157 would not have a significant
effect on federal spending.
Budgetary Effects of Health Information Technology
CBO expects that the use of information technology in the
health care sector will continue to grow under current law, and
that expanded use of such technology will likely produce
improvements in the quality of the health care provided to U.S.
residents. In some cases, thatimprovement in the quality of
health care might mean less use of medical services; in other cases, it
might mean an increase in utilization.
Under current law, CBO also expects that the expanded use
of health information technology will likely result in
increased efficiency in the health care system. That is, the
use of information technology will result in more health
benefits per dollar of spending than would otherwise be
realized.
Experts caution, however, that the evidence is mixed
concerning whether those improvements in quality and efficiency
will also result in lower spending for health care, either in
the private sector or for government programs.\1\ In her recent
testimony to the Senate Subcommittee on Technology, Innovation,
and Competitiveness, Dr. Carolyn Clancy (Director of the Agency
for Health Research and Quality) noted that, if poorly designed
or implemented, health information technology will not bring
those benefits, and in some cases may even lead to new medical
errors and potential costs. She also noted that achieving
improvements in health care and realizing potential cost
savings will require real process change and will not result
from simply acquiring and deploying hardware and software.
---------------------------------------------------------------------------
\1\ See, for example:
Testimony of Carolyn Clancy, MD to the Subcommittee on Technology,
Innovation and Competitiveness of the Senate Committee on Commerce,
Science, and Transportation, June 21, 2006. (http://
commerce.senate.gov/public/_files/Clancy062106.pdf)
Clifford Goodman, ``Savings In Electronic Medical Record Systems?
Do It For The Quality'', Health Affairs, Sept/Oct 2005. (http://
content.healthaffairs.org/cgi/content/full/24/5/1124)
Paul B. Ginsburg, Ph.D., ``Controlling Health Care Costs'', NEJM,
Oct 14, 2004. (http://content.nejm.org/cgi/content/full/351/16/1591)
James Walker, ``Electronic Medical Records And Health Care
Transformation'', Health Affairs, Sept./Oct. 2005. (http://
content.healthaffairs.org/cgi/content/full/24/5/1118)
---------------------------------------------------------------------------
To the extent that health information technology will
result in lower spending for health care, much of those savings
would not be passed through as a reduction in direct spending
for federal programs--particularly Medicare--under current law.
For example, two areas account for much of the potential
savings reported in the literature: reductions in the cost of
care during a hospital stay, and administrative savings for
providers and claims processors. Under current law, Medicare's
payment rates for hospital inpatient services are updated each
year to reflect changes in general inflation rates, and do not
reflect changes in the costs that hospitals incur (either for
administrative activities or for providing health care
services). Medicare might realize savings in the cost of
processing claims. However, funding for Medicare's claims-
processing activities is subject to appropriation, so such
savings could only be realized through the appropriations
process.
In preparing an estimate of the budgetary effect of
enacting this bill--or other legislation involving health
information technology--CBO focuses on the extent to which the
bill would change the rate at which the use of health
technology will grow or how well that technology will be
designed and implemented under current law. CBO then evaluates
the extent to which those changes, in conjunction with other
provisions in current law and in the proposed legislation,
would affect direct spending.
CBO estimates that enacting H.R. 4157 would not
significantly affect either the rate at which the use of health
technology will grow or how well that technology will be
designed and implemented. Therefore, CBO estimates enacting the
bill would have no effect on spending by the federal
government, other than the specific appropriations it would
authorize.
Estimated impact on state, local, and tribal governments:
H.R. 4157 would preempt, in some circumstances, state laws that
govern record-keeping requirements and that establish civil or
criminal penalties for the exchange of health information
technology. While those preemptions would be intergovernmental
mandates as defined in UMRA, CBO estimates that the costs of
the mandates to states would be small and, thus, would not
exceed the thresholds established in UMRA ($64 million in 2006,
adjusted annually for inflation).
The bill would preempt state laws that require providers to
maintain data in paper form, if those providers receive federal
funds and maintains the data electronically. In most cases,
such a preemption would be a condition of aid and thus not an
intergovernmental mandate, as most federal assistance to health
care providers comes through state governments as part of
agreements with the federal government. However, some federal
assistance goes directly to providers, independent of federal
agreements with state governments, and in those cases the
preemption of state laws requiring paper documentation would be
an intergovernmental mandate. CBO estimates, however, that the
preemption would not significantly affect the budgets of state,
local, or tribal governments because it would impose no duty on
those governments that would result in additional spending or a
loss of revenues.
The bill also would change safe-harbor guidelines for the
exchange of health information technology, and it would preempt
state laws that would assess civil or criminal penalties on
exchanges of information that the bill would allow. While this
preemption could affect the ability of states to assess
penalties and collect revenues, CBO estimates that any such
losses would be small.
Estimated impact on the private sector: The bill would
impose a private-sector mandate on health plans, providers, and
clearing houses by requiring them to adopt updated standards
for claims transactions by April 1, 2009. The bill would
require them to move from version 4010 to version 5010 of the
Accredited Standards Committee X12 standards. It would also
require them to move from version 5.1 of the National Council
for Prescription Drug Programs Telecommunication Standards to
the most recent version approved as of April 1, 2008.
CBO assumes that this deadline would be met under current
law. Thus, this mandate would impose no additional costs on
private-sector entities.
Estimate prepared by: Federal costs: Tom Bradley, Jeanne De
Sa, and Camile Williams; impact on state, local and tribal
governments: Leo Lex; impact on the private sector: Stuart
Hagen and Julie Lee.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title and table of contents
This Act may be cited as the ``Better Health Information
System Act of 2006.''
Section 2. Preserving privacy and security laws
Section 2 states that nothing in this Act affects the
scope, substance, or applicability of privacy and security
regulations pursuant to the Health Insurance Portability and
Accountability Act of 1996 (HIPAA; Public Law 104-191).
Section 101. Office of the National Coordinator for Health Information
Technology
Section 101 codifies the Office of National Coordinator for
Health Information Technology (National Coordinator) including
National goals and duties. This would include work with other
agencies regarding the security of health information.
Section 102. Report on the American Health Information Community
Section 102 requires a report to Congress within one year
on the work of the American Health Information Community
(Community) along with recommendations for the transition of
the Community to a longer-term advisory and facilitation
entity.
Section 103. Interoperability planning process; Federal information
collection activities
Section 103 provides that the National Coordinator shall
conduct by August 31, 2008 a national survey to measure the
capabilities of entities to exchange electronic health
information.
This section requires that not later than December 31,
2006, the National Coordinator to publish a strategic plan,
including a schedule, for the assessment and endorsement of
core interoperability guidelines for significant use cases. The
National Coordinator has substantial flexibility in how to
administer this section and to interpret the terms ``core,''
``interoperability,'' and ``significant use cases.'' Moreover,
the scope and meaning of those terms may change as technology
adoption, software, and health care practices evolve.
The National Coordinator shall endorse a subset of core
interoperability guidelines not later than one year after the
publication of the schedule, and annually thereafter, with
endorsement of all such guidelines consistent with the schedule
by August 31, 2009.
Section 103 requires the President to assure that
activities involving the broad collection and submission of
health information allow for submissions consistent with core
interoperability guidelines within three years of endorsement
of such guidelines by the National Coordinator.
Further, the section requires the President to take
measures to allow access to useful categories of non-
identifiable health information in records maintained by the
Federal government or entities under contract with the Federal
government to advance health care quality and health research.
Section 103 also requires, for five years following the
date of enactment of this Act, the National Coordinator to
review and make recommendations regarding the operation of
health information collection and exchange in the Federal
government and the proposed purchasing plans of Federal
agencies.
Section 104. Ensuring health care providers may maintain health
information in electronic form
Section 104 assures that any health care provider may
maintain records in electronic form for Federally-funded
programs.
Section 105. Study and report on state, regional, and community health
information exchanges
Section 105 requires the Secretary of HHS to conduct a
study on issues related to the development, operation, and
implementation of State, regional, and community health
information exchanges.
Section 106. Grants to integrated health systems to promote health
information technologies to improve coordination of care for
the uninsured, underinsured, and medically underserved.
Section 106 authorizes the Secretary to make grants to
integrated health care systems for projects to bettor
coordinate the provision of healthcare through the adoption of
new health information technology or the significant
improvement of existing health information technology.
Section 107. Demonstration program
Section 107 requires the Secretary to establish a
demonstration program under which grants are awarded to small
physician practices that are located in rural areas or
medically underserved urban areas for the purchase and support
of health information technology.
Section 201. Procedures to ensure timely updating of standards that
enable electronic exchanges
Section 201 streamlines the current procedures under
Section 1173(a) of the Social Security Act for updating
standards that enable electronic exchanges.
Section 202. Upgrade ASC X12 and NCPDP standards
Section 202 requires upgrading to the Accredited Standards
Committee X12 (ASC X12) version 5010. This section also
requires upgrading the National Council for Prescription Drug
Programs (NCPDP) telecommunications standards to the latest
version as approved by the Council and reviewed by the National
Committee on Vital Health Statistics (NCVHS) as of April 1,
2007. Both of these standards would be applied to transactions
occurring on or after April 1, 2009.
Section 203. Coding and documentation of non-medical information
Section 203 specifies that in any regulation or other
action implementing the International Classification of
Diseases, 10th revision, Clinical Modification (ICD-10-CM) or
the International Classification of Diseases, 10th revision,
Procedure Coding System (ICD-10-PCS), the Secretary of HHS
shall ensure that no health care provider is required to code
to a level of specificity that would require documentation of
non-medical information on the external cause of any given type
of injury.
Section 301. Safe harbors to antikickback civil penalties and criminal
penalties for provision of health information technology and
training services
Section 301 creates a safe harbor from current anti-
kickback laws for providing certain health information
technology or training and related services. The safe harbor
requires that any such provision of technology, training, or
related services not be pursuant to an agreement limiting its
use by entity, limiting its connection to other technology, or
conditioned on the referral of patients.
Section 302. Exception to limitation on certain physician referrals
(under Stark) for provision of health information technology
and training services to health care professionals
Section 302 creates a safe harbor from current physician
self-referral rules for providing certain health information
technology or training and related services. The safe harbor
requires that any such provision of technology, training or
related services not be pursuant to an agreement limiting its
use by entity, limiting its connection to other technology, or
conditioned on the referral of patients.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
PUBLIC HEALTH SERVICE ACT
* * * * * * *
TITLE II--ADMINISTRATION AND MISCELLANEOUS PROVISIONS
* * * * * * *
PART D--HEALTH INFORMATION TECHNOLOGY
SEC. 271. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
(a) Establishment.--There is established within the
Department of Health and Human Services an Office of the
National Coordinator for Health Information Technology that
shall be headed by the National Coordinator for Health
Information Technology (referred to in this part as the
``National Coordinator''). The National Coordinator shall be
appointed by and report directly to the Secretary. The National
Coordinator shall be paid at a rate equal to the rate of basic
pay for level IV of the Executive Schedule.
(b) Goals of Nationwide Interoperable Health Information
Technology Infrastructure.--The National Coordinator shall
perform the duties under subsection (c) in a manner consistent
with the development of a nationwide interoperable health
information technology infrastructure that--
(1) improves health care quality, promotes data
accuracy, reduces medical errors, increases the
efficiency of care, and advances the delivery of
appropriate, evidence-based health care services;
(2) promotes wellness, disease prevention, and
management of chronic illnesses by increasing the
availability and transparency of information related to
the health care needs of an individual for such
individual;
(3) promotes the availability of appropriate and
accurate information necessary to make medical
decisions in a usable form at the time and in the
location that the medical service involved is provided;
(4) produces greater value for health care
expenditures by reducing health care costs that result
from inefficiency, medical errors, inappropriate care,
and incomplete or inaccurate information;
(5) promotes a more effective marketplace, greater
competition, greater systems analysis, increased
consumer choice, enhanced quality, and improved
outcomes in health care services;
(6) with respect to health information of consumers,
advances the portability of such information and the
ability of such consumers to share and use such
information to assist in the management of their health
care;
(7) improves the coordination of information and the
provision of such services through an effective
infrastructure for the secure and authorized exchange
and use of health care information;
(8) is consistent with legally applicable
requirements with respect to securing and protecting
the confidentiality of individually identifiable health
information of a patient;
(9) promotes the creation and maintenance of
transportable, secure, Internet-based personal health
records, including promoting the efforts of health care
payers and health plan administrators for a health
plan, such as Federal agencies, private health plans,
and third party administrators, to provide for such
records on behalf of members of such a plan;
(10) promotes access to and review of the electronic
health record of a patient by such patient;
(11) promotes health research and health care quality
research and assessment; and
(12) promotes the efficient and streamlined
development, submission, and maintenance of electronic
health care clinical trial data.
(c) Duties of the National Coordinator.--
(1) Strategic planner for interoperable health
information technology.--The National Coordinator shall
provide for a strategic plan for the nationwide
implementation of interoperable health information
technology in both the public and private health care
sectors consistent with subsection (b).
(2) Principal advisor to the secretary.--The National
Coordinator shall serve as the principal advisor to the
Secretary on the development, application, and use of
health information technology, and shall coordinate the
policies and programs of the Department of Health and
Human Services for promoting the use of health
information technology.
(3) Intragovernmental coordinator.--The National
Coordinator shall ensure that health information
technology policies and programs of the Department of
Health and Human Services are coordinated with those of
relevant executive branch agencies and departments with
a goal to avoid duplication of effort, to align the
health information architecture of each agency or
department toward a common approach, to ensure that
each agency or department conducts programs within the
areas of its greatest expertise and its mission in
order to create a national interoperable health
information system capable of meeting national public
health needs effectively and efficiently, and to assist
Federal agencies and departments in security programs,
policies, and protections to prevent unauthorized
access to individually identifiable health information
created, maintained, or in the temporary possession of
that agency or department. The coordination authority
provided to the National Coordinator under the previous
sentence shall supercede any such authority otherwise
provided to any other official of the Department of
Health and Human Services. For the purposes of this
paragraph, the term ``unauthorized access'' means
access that is not authorized by that agency or
department including unauthorized employee access.
(4) Advisor to omb.--The National Coordinator shall
provide to the Director of the Office of Management and
Budget comments and advice with respect to specific
Federal health information technology programs.
(5) Promoter of health information technology in
medically underserved communities.--The National
Coordinator shall--
(A) identify sources of funds that will be
made available to promote and support the
planning and adoption of health information
technology in medically underserved
communities, including in urban and rural
areas, either through grants or technical
assistance;
(B) coordinate with the funding sources to
help such communities connect to identified
funding; and
(C) collaborate with the Agency for
Healthcare Research and Quality and the Health
Services Resources Administration and other
Federal agencies to support technical
assistance, knowledge dissemination, and
resource development, to medically underserved
communities seeking to plan for and adopt
technology and establish electronic health
information networks across providers.
SEC. 272. INTEROPERABILITY PLANNING PROCESS; FEDERAL INFORMATION
COLLECTION ACTIVITIES.
(a) Strategic Interoperability Planning Process.--
(1) Assessment and endorsement of core strategic
guidelines.--
(A) In general.--Not later than December 31,
2006, the National Coordinator shall publish a
strategic plan, including a schedule, for the
assessment and the endorsement of core
interoperability guidelines for significant use
cases consistent with this subsection. The
National Coordinator may update such plan from
time to time.
(B) Endorsement.--
(i) In general.--Consistent with the
schedule under this paragraph and not
later than one year after the
publication of such schedule, the
National Coordinator shall endorse a
subset of core interoperability
guidelines for significant use cases.
The National Coordinator shall continue
to endorse subsets of core
interoperability guidelines for
significant use cases annually
consistent with the schedule published
pursuant to this paragraph, with
endorsement of all such guidelines
completed not later than August 31,
2009.
(ii) Consultation.--All such
endorsements shall be in consultation
with the American Health Information
Community and other appropriate
entities.
(iii) Voluntary compliance.--
Compliance with such guidelines shall
be voluntary, subject to subsection
(b)(1).
(C) Consultation with other parties.--The
National Coordinator shall develop and
implement such strategic plan in consultation
with the American Health Information Community
and other appropriate entities.
(D) Definitions.--For purposes of this
section:
(i) Interoperability guideline.--The
term ``interoperability guideline''
means a guideline to improve and
promote the interoperability of health
information technology for purposes of
electronically accessing and exchanging
health information. Such term includes
named standards, architectures,
software schemes for identification,
authentication, and security, and other
information needed to ensure the
reproducible development of common
solutions across disparate entities.
(ii) Core interoperability
guideline.--The term ``core
interoperability guideline'' means an
interoperability guideline that the
National Coordinator determines is
essential and necessary for purposes
described in clause (i).
(iii) Significant use case.--The term
``significant use case'' means a
category (as specified by the National
Coordinator) that identifies a
significant use or purpose for the
interoperability of health information
technology, such as for the exchange of
laboratory information, drug
prescribing, clinical research, and
electronic health records.
(2) National survey.--
(A) In general.--Not later than August 31,
2008, the National Coordinator shall conduct
one or more surveys designed to measure the
capability of entities (including Federal
agencies, State and local government agencies,
and private sector entities) to exchange
electronic health information by appropriate
significant use case. Such surveys shall
identify the extent to which the type of health
information, the use for such information, or
any other appropriate characterization of such
information may relate to the capability of
such entities to exchange health information in
a manner that is consistent with methods to
improve the interoperability of health
information and with core interoperability
guidelines.
(B) Dissemination of survey results.--The
National Coordinator shall disseminate the
results of such surveys in a manner so as to--
(i) inform the public on the
capabilities of entities to exchange
electronic health information;
(ii) assist in establishing a more
interoperable information architecture;
and
(iii) identify the status of health
information systems used in Federal
agencies and the status of such systems
with respect to interoperability
guidelines.
(b) Federal Health Information Collection Activities.--
(1) Requirements.--With respect to a core
interoperability guideline endorsed under subsection
(a)(1)(B) for a significant use case, the President
shall take measures to ensure that Federal activities
involving the broad collection and submission of health
information are consistent with such guideline within
three years after the date of such endorsement.
(2) Promoting use of non-identifiable health
information to improve health research and health care
quality.--
(A) In general.--Where feasible, and
consistent with applicable privacy or security
or other laws, the President, in consultation
with the Secretary, shall take measures to
allow timely access to useful categories of
non-identifiable health information in records
maintained by the Federal government, or
maintained by entities under contract with the
Federal government, to advance health care
quality and health research where such
information is in a form that can be used in
such research. The President shall consult with
appropriate Federal agencies, and solicit
public comment, on useful categories of
information, and appropriate measures to take.
The President may consider the administrative
burden and the potential for improvements in
health care quality in determining such
appropriate measures. In addition, the
President, in consultation with the Secretary,
shall encourage voluntary private and public
sector efforts to allow access to such useful
categories of non-identifiable health
information to advance health care quality and
health research.
(B) Non-identifiable health information
defined.--For purposes of this paragraph, the
term ``non-identifiable health information''
means information that is not individually
identifiable health information as defined in
rules promulgated pursuant to section 264(c) of
the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2
note), and includes information that has been
de-identified so that it is no longer
individually identifiable health information,
as defined in such rules.
(3) Annual review and report.--For each year during
the five-year period following the date of the
enactment of this section, the National Coordinator
shall review the operation of health information
collection by and submission to the Federal government
and the purchases (and planned purchases) of health
information technology by the Federal government. For
each such year and based on the review for such year,
the National Coordinator shall submit to the President
and Congress recommendations on methods to--
(A) streamline (and eliminate redundancy in)
Federal systems used for the collection and
submission of health information;
(B) improve efficiency in such collection and
submission;
(C) increase the ability to assess health
care quality; and
(D) reduce health care costs.
SEC. 273. ENSURING HEALTH CARE PROVIDERS MAY MAINTAIN HEALTH
INFORMATION IN ELECTRONIC FORM.
(a) In General.--Any health care provider that participates
in a health care program that receives Federal funds shall be
deemed as meeting any requirement for the maintenance of data
in paper form under such program (whether or not for purposes
of management, billing, reporting, reimbursement, or otherwise)
if the required data is maintained in an electronic form.
(b) Relation to State Laws.--Beginning on the date that is
one year after the date of the enactment of this section,
subsection (a) shall supersede any contrary provision of State
law.
(c) Construction.--Nothing in this section shall be construed
as--
(1) requiring health care providers to maintain or
submit data in electronic form;
(2) preventing a State from permitting health care
providers to maintain or submit data in paper form; or
(3) preventing a State from requiring health care
providers to maintain or submit data in electronic
form.
TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE
* * * * * * *
Part D--Primary Health Care
Subpart I--Health Centers
* * * * * * *
SEC. 330M. GRANTS FOR IMPROVEMENT OF THE COORDINATION OF CARE FOR THE
UNINSURED, UNDERINSURED, AND MEDICALLY UNDERSERVED.
(a) In General.--The Secretary may make grants to integrated
health care systems, in accordance with this section, for
projects to better coordinate the provision of health care
through the adoption of new health information technology, or
the significant improvement of existing health information
technology, to improve the provision of health care to
uninsured, underinsured, and medically underserved individuals
(including in urban and rural areas) through health-related
information about such individuals, throughout such a system
and at the point of service.
(b) Eligibility.--
(1) Application.--To be eligible to receive a grant
under this section, an integrated health care system
shall prepare and submit to the Secretary an
application, at such time, in such manner, and
containing such information as the Secretary may
require, including--
(A) a description of the project that the
system will carry out using the funds provided
under the grant;
(B) a description of the manner in which the
project funded under the grant will advance the
goal specified in subsection (a); and
(C) a description of the populations to be
served by the adoption or improvement of health
information technology.
(2) Optional reporting condition.--The Secretary may
also condition the provision of a grant to an
integrated health care system under this section for a
project on the submission by such system to the
Secretary of a report on the impact of the health
information technology adopted (or improved) under such
project on the delivery of health care and the quality
of care (in accordance with applicable measures of such
quality). Such report shall be at such time and in such
form and manner as specified by the Secretary.
(c) Integrated Health Care System Defined.--For purposes of
this section, the term ``integrated health care system'' means
a system of health care providers that is organized to provide
care in a coordinated fashion and has a demonstrated commitment
to provide uninsured, underinsured, and medically underserved
individuals with access to such care.
(d) Priorities.--In making grants under this section, the
Secretary shall give priority to an integrated health care
system--
(1) that can demonstrate past successful community-
wide efforts to improve the quality of care provided
and the coordination of care for the uninsured,
underinsured, and medically underserved; or
(2) if the project to be funded through such a
grant--
(A) will improve the delivery of health care
and the quality of care provided; and
(B) will demonstrate savings for State or
Federal health care benefits programs or
entities legally obligated under Federal law to
provide health care from the reduction of
duplicative health care services,
administrative costs, and medical errors.
(e) Limitation, Matching Requirement, and Conditions.--
(1) Limitation on use of funds.--None of the funds
provided under a grant made under this section may be
used for a project providing for the adoption or
improvement of health information technology that is
used exclusively for financial record keeping, billing,
or other non-clinical applications.
(2) Matching requirement.--To be eligible for a grant
under this section an integrated health care system
shall contribute non-Federal contributions to the costs
of carrying out the project for which the grant is
awarded in an amount equal to $1 for each $5 of Federal
funds provided under the grant.
(f) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section $15,000,000 for each
of fiscal years 2007 and 2008.
* * * * * * *
----------
SOCIAL SECURITY ACT
* * * * * * *
TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION
Part A--General Provisions
* * * * * * *
CIVIL MONETARY PENALTIES
Sec. 1128A. (a) * * *
(b)(1) * * *
* * * * * * *
(4) For purposes of this subsection, inducements to reduce or
limit services described in paragraph (1) shall not include the
practical or other advantages resulting from health information
technology or related installation, maintenance, support, or
training services.
* * * * * * *
(i) For the purposes of this section:
(1) * * *
* * * * * * *
(8) The term ``health information technology'' means
hardware, software, license, right, intellectual
property, equipment, or other information technology
(including new versions, upgrades, and connectivity)
designed primarily for the electronic creation,
maintenance, or exchange of health information to
better coordinate care or improve health care quality,
efficiency, or research.
* * * * * * *
CRIMINAL PENALTIES FOR ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS
Sec. 1128B. (a) * * *
(b)(1) * * *
* * * * * * *
(3) Paragraphs (1) and (2) shall not apply to--
(A) * * *
* * * * * * *
(G) the waiver or reduction by pharmacies (including
pharmacies of the Indian Health Service, Indian tribes,
tribal organizations, and urban Indian organizations)
of any cost-sharing imposed under part D of title
XVIII, if the conditions described in clauses (i)
through (iii) of section 1128A(i)(6)(A) are met with
respect to the waiver or reduction (except that, in the
case of such a waiver or reduction on behalf of a
subsidy eligible individual (as defined in section
1860D-14(a)(3)), section 1128A(i)(6)(A) shall be
applied without regard to clauses (ii) and (iii) of
that section); [and]
(H) any remuneration between a federally qualified
health center (or an entity controlled by such a health
center) and an MA organization pursuant to a written
agreement described in section 1853(a)(4)[.];
[(H)] (I) any remuneration between a health center
entity described under clause (i) or (ii) of section
1905(l)(2)(B) and any individual or entity providing
goods, items, services, donations, loans, or a
combination thereof, to such health center entity
pursuant to a contract, lease, grant, loan, or other
agreement, if such agreement contributes to the ability
of the health center entity to maintain or increase the
availability, or enhance the quality, of services
provided to a medically underserved population served
by the health center entity[.]; and
(J) any nonmonetary remuneration (in the form of
health information technology, as defined in section
1128A(i)(8), or related installation, maintenance,
support or training services) made to a person by an
entity that is a hospital, group practice, prescription
drug plan sponsor, or Medicare Advantage organization
if--
(i) the provision of such remuneration is
without an agreement between the parties or
legal condition that--
(I) limits or restricts the use of
the health information technology to
services provided by the physician to
individuals receiving services at the
entity;
(II) limits or restricts the use of
the health information technology in
conjunction with other health
information technology; or
(III) conditions the provision of
such remuneration on the referral of
patients or business to the entity;
(ii) such remuneration is arranged for in a
written agreement that is signed by the parties
involved (or their representatives) and that
specifies the remuneration solicited or
received (or offered or paid) and states that
the provision of such remuneration is made for
the primary purpose of better coordination of
care or improvement of health quality,
efficiency, or research; and
(iii) the entity providing the remuneration
(or a representative of such entity) has not
taken any action to disable any basic feature
of any hardware or software component of such
remuneration that would permit
interoperability.
* * * * * * *
Part C--Administrative Simplification
* * * * * * *
TIMETABLES FOR ADOPTION OF STANDARDS
Sec. 1174. (a) * * *
(b) Additions and Modifications to Standards.--
(1) In general.--Except as provided in paragraph (2),
the Secretary shall review the standards adopted under
section 1173, and shall adopt modifications to the
standards (including additions to the standards), as
determined appropriate, but not more frequently than
once every 12 monthsand in accordance with paragraph
(3). Any addition or modification to a standard shall
be completed in a manner which minimizes the disruption
and cost of compliance. For purposes of this subsection
and section 1173(c)(2), the term ``modification''
includes a new version or a version upgrade.
* * * * * * *
(3) Expedited procedures for adoption of additions
and modifications to standards.--
(A) In general.--For purposes of paragraph
(1), the Secretary shall provide for an
expedited upgrade program (in this paragraph
referred to as the ``upgrade program''), in
accordance with this paragraph, to develop and
approve additions and modifications to the
standards adopted under section 1173(a) to
improve the quality of such standards or to
extend the functionality of such standards to
meet evolving requirements in health care.
(B) Publication of notices.--Under the
upgrade program:
(i) Voluntary notice of initiation of
process.--Not later than 30 days after
the date the Secretary receives a
notice from a standard setting
organization that the organization is
initiating a process to develop an
addition or modification to a standard
adopted under section 1173(a), the
Secretary shall publish a notice in the
Federal Register that--
(I) identifies the subject
matter of the addition or
modification;
(II) provides a description
of how persons may participate
in the development process; and
(III) invites public
participation in such process.
(ii) Voluntary notice of preliminary
draft of additions or modifications to
standards.--Not later than 30 days
after the date of the date the
Secretary receives a notice from a
standard setting organization that the
organization has prepared a preliminary
draft of an addition or modification to
a standard adopted by section 1173(a),
the Secretary shall publish a notice in
the Federal Register that--
(I) identifies the subject
matter of (and summarizes) the
addition or modification;
(II) specifies the procedure
for obtaining the draft;
(III) provides a description
of how persons may submit
comments in writing and at any
public hearing or meeting held
by the organization on the
addition or modification; and
(IV) invites submission of
such comments and participation
in such hearing or meeting
without requiring the public to
pay a fee to participate.
(iii) Notice of proposed addition or
modification to standards.--Not later
than 30 days after the date of the date
the Secretary receives a notice from a
standard setting organization that the
organization has a proposed addition or
modification to a standard adopted
under section 1173(a) that the
organization intends to submit under
subparagraph (D)(iii), the Secretary
shall publish a notice in the Federal
Register that contains, with respect to
the proposed addition or modification,
the information required in the notice
under clause (ii) with respect to the
addition or modification.
(iv) Construction.--Nothing in this
paragraph shall be construed as
requiring a standard setting
organization to request the notices
described in clauses (i) and (ii) with
respect to an addition or modification
to a standard in order to qualify for
an expedited determination under
subparagraph (C) with respect to a
proposal submitted to the Secretary for
adoption of such addition or
modification.
(C) Provision of expedited determination.--
Under the upgrade program and with respect to a
proposal by a standard setting organization for
an addition or modification to a standard
adopted under section 1173(a), if the Secretary
determines that the standard setting
organization developed such addition or
modification in accordance with the
requirements of subparagraph (D) and the
National Committee on Vital and Health
Statistics recommends approval of such addition
or modification under subparagraph (E), the
Secretary shall provide for expedited treatment
of such proposal in accordance with
subparagraph (F).
(D) Requirements.--The requirements under
this subparagraph with respect to a proposed
addition or modification to a standard by a
standard setting organization are the
following:
(i) Request for publication of
notice.--The standard setting
organization submits to the Secretary a
request for publication in the Federal
Register of a notice described in
subparagraph (B)(iii) for the proposed
addition or modification.
(ii) Process for receipt and
consideration of public comment.--The
standard setting organization provides
for a process through which, after the
publication of the notice referred to
under clause (i), the organization--
(I) receives and responds to
public comments submitted on a
timely basis on the proposed
addition or modification before
submitting such proposed
addition or modification to the
National Committee on Vital and
Health Statistics under clause
(iii);
(II) makes publicly available
a written explanation for its
response in the proposed
addition or modification to
comments submitted on a timely
basis; and
(III) makes public comments
received under clause (I)
available, or provides access
to such comments, to the
Secretary.
(iii) Submittal of final proposed
addition or modification to ncvhs.--
After completion of the process under
clause (ii), the standard setting
organization submits the proposed
addition or modification to the
National Committee on Vital and Health
Statistics for review and consideration
under subparagraph (E). Such submission
shall include information on the
organization's compliance with the
notice and comment requirements (and
responses to those comments) under
clause (ii).
(E) Hearing and recommendations by national
committee on vital and health statistics.--
Under the upgrade program, upon receipt of a
proposal submitted by a standard setting
organization under subparagraph (D)(iii) for
the adoption of an addition or modification to
a standard, the National Committee on Vital and
Health Statistics shall provide notice to the
public and a reasonable opportunity for public
testimony at a hearing on such addition or
modification. The Secretary may participate in
such hearing in such capacity (including
presiding ex officio) as the Secretary shall
determine appropriate. Not later than 90 days
after the date of receipt of the proposal, the
Committee shall submit to the Secretary its
recommendation to adopt (or not adopt) the
proposed addition or modification.
(F) Determination by secretary to accept or
reject national committee on vital and health
statistics recommendation.--
(i) Timely determination.--Under the
upgrade program, if the National
Committee on Vital and Health
Statistics submits to the Secretary a
recommendation under subparagraph (E)
to adopt a proposed addition or
modification, not later than 90 days
after the date of receipt of such
recommendation the Secretary shall make
a determination to accept or reject the
recommendation and shall publish notice
of such determination in the Federal
Register not later than 30 days after
the date of the determination.
(ii) Contents of notice.--If the
determination is to reject the
recommendation, such notice shall
include the reasons for the rejection.
If the determination is to accept the
recommendation, as part of such notice
the Secretary shall promulgate the
modified standard (including the
accepted proposed addition or
modification accepted).
(iii) Limitation on consideration.--
The Secretary shall not consider a
proposal under this subparagraph unless
the Secretary determines that the
requirements of subparagraph (D)
(including publication of notice and
opportunity for public comment) have
been met with respect to the proposal.
(G) Exemption from paperwork reduction act.--
Chapter 35 of title 44, United States Code,
shall not apply to a final rule promulgated
under subparagraph (F).
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
LIMITATION ON CERTAIN PHYSICIAN REFERRALS
Sec. 1877. (a) * * *
(b) General Exceptions to Both Ownership and Compensation
Arrangement Prohibitions.--Subsection (a)(1) shall not apply in
the following cases:
(1) * * *
* * * * * * *
(6) Information technology and training services.--
(A) In general.--Any nonmonetary remuneration
(in the form of health information technology
or related installation, maintenance, support
or training services) made by an entity that is
a hospital, group practice, prescription drug
plan sponsor, or a Medicare Advantage
organization to a physician if--
(i) the provision of such
remuneration is without an agreement
between the parties or legal condition
that--
(I) limits or restricts the
use of the health information
technology to services provided
by the physician to individuals
receiving services at the
entity;
(II) limits or restricts the
use of the health information
technology in conjunction with
other health information
technology; or
(III) conditions the
provision of such remuneration
on the referral of patients or
business to the entity;
(ii) such remuneration is arranged
for in a written agreement that is
signed by the parties involved (or
their representatives) and that
specifies the remuneration made and
states that the provision of such
remuneration is made for the primary
purpose of better coordination of care
or improvement of health quality,
efficiency, or research; and
(iii) the entity (or a representative
of such entity) has not taken any
action to disable any basic feature of
any hardware or software component of
such remuneration that would permit
interoperability.
(B) Health information technology defined.--
For purposes of subparagraph (A), the term
``health information technology'' means
hardware, software, license, right,
intellectual property, equipment, or other
information technology (including new versions,
upgrades, and connectivity) designed primarily
for the electronic creation, maintenance, or
exchange of health information to better
coordinate care or improve health care quality,
efficiency, or research.
* * * * * * *
DISSENTING VIEWS
SUMMARY
H.R. 4157, as amended and reported by the Committee on
Energy and Commerce, is inadequate to effectively move the U.S.
healthcare system into an electronic age and adopt health
information technology, such as electronic health records, that
will enable providers to communicate with each other to achieve
administrative efficiencies and improve care. The bill does not
include sufficient funding to enable providers to adopt and
implement systems in their offices. Instead, it undermines
existing fraud and abuse laws in the name of spreading health
information technology. And, even though moving to an
electronic age for healthcare records will make personal
information more vulnerable to breach and theft, the bill fails
to protect the privacy of patient medical information.
The Minority offered a number of amendments in an effort to
(1) provide funding for healthcare providers to purchase and
adopt health information technology without undermining
protective fraud and abuse laws; (2) improve the quality of
care, care coordination, and patient access to information; (3)
allow providers, labs, and others in the healthcare system to
communicate electronically with each other
(``interoperability''), and (4) protect the privacy of
patient's information in a new world where information will be
maintained electronically. These amendments were rejected on
party-line votes.
It is particularly disappointing that a bipartisan Senate
bill on health information technology that passed the Senate
unanimously on November 18, 2005, has been ignored by the
Committee as a starting point for discussions. Instead,
Republican colleagues chose to consider a highly partisan bill,
greatly reducing the likelihood of enactment of health IT
legislation this Congress.
DEMOCRATS OFFERED A SUBSTITUTE CONSISTING OF THE BIPARTISAN SENATE
LEGISLATION ALONG WITH PRIVACY PROTECTIONS
Representatives Pallone and Gonzalez offered a substitute
that included the text of the Senate bill, S. 1418, a
bipartisan bill that passed the Senate unanimously on November
18, 2005, along with protections to ensure privacy of patient
medical records. Unlike the Committee bill, the Democratic
substitute would have ensured the rapid adoption of
interoperable health information technology without exposing
Federal health programs to fraud. Its stronger standards and
guaranteed funding would more rapidly move the U.S. healthcare
system to the electronic age.
The Democratic substitute codifies the Office of the
National Coordinator for Health Information Technology and
assigns it duties, including the adoption of interoperability
standards allowing for electronic communication between
providers, plans, and others. It requires that the Federal
Government purchase health information technology that meets
interoperability standards. It also includes funding in the
form of grants and loans for providers and regional
collaboratives to buy and implement health information
technology. The technology must meet standards of
interoperability, as well. It requires the creation of a
voluntary certification process for technology sold by vendors
allowing providers to identify whether a product meets their
needs and the needs of their patients before purchasing it. It
does not make exceptions to the Stark self-referral and anti-
kickback fraud and abuse laws, but instead leverages private
dollars for a revolving loan fund that would not create a
conflict of interest between providers. The substitute also
includes privacy and security protections offered by
Representative Markey in his privacy amendment described below.
It was defeated on a party-line vote.
THE LEGISLATION FAILS TO PROTECT THE PRIVACY OF MEDICAL RECORDS
H.R. 4157 does not include adequate protections to ensure
the privacy of patient personal medical information. The
expanded adoption and use of technology to enable electronic
exchange of information places larger amounts of personally-
sensitive data at risk of disclosure or breach. For the
successful adoption of health information technology, patients
will need assurances their medical records are secure.
President Bush has acknowledged this need, noting,
``One thing is the federal government has got to make
sure the privacy rules are strong. You're going to hear
us talk about medical--electronic medical records. And
that's exciting. But it's not so exciting if you're a
patient who thinks somebody could snoop on your
records, to put it bluntly . . . for those people--
there's a lot of people in America who say, good, I
want there to be good information technology in the
health care field, I just don't want somebody looking
at my records unless I give them permission to do so.
And I fully understand that. And your records are
private, if that's the way you want them to be.'' \1\
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\1\ President Bush Touts Benefits of Health Care Information
Technology; Department of Veterans Affairs Medical Center, Baltimore,
Maryland, April 27, 2004. (www.whitehouse.gov/news/releases/2004/04/
20040427-5.html)
The bill, however, fails to include adequate protections
for privacy, merely affirming the limited protections in the
current law, the Health Insurance Portability and
Accountability Act (HIPAA).
The HIPAA privacy rule, however, is not comprehensive and
does not include provisions to adequately protect privacy in an
electronic healthcare world. For example, the existing Federal
law now only directly applies to some providers, health plans,
and health information clearinghouses, but does not apply to
anyone else who could receive sensitive health information,
such as anyone the provider contracts with, or electronic
health records companies. HIPAA alsodoes not require consent
for the use or disclosure of health information for treatment, payment,
or healthcare operations. This means, for example, that companies could
use sensitive, individual information for fundraising.
Current law privacy rules under HIPAA, which would be
maintained under the bill, do not require that the person be
notified if there is a breach of data where individually-
identifiable health information is lost, stolen, or used for an
unauthorized purpose. This can include the accidental or
erroneous disclosure of individually identifiable health
information or the purposeful breach (hacking, theft) of a
computer system to access information. And, while HIPAA allows
for civil and criminal penalties to be assessed on violators by
the Government, despite 19,420 grievances filed so far, not one
entity has been assessed civil penalties; only two criminal
cases have been prosecuted.
Moreover, HIPAA does not allow an individual who has been
harmed to pursue enforcement or seek damages; only the
Government is permitted to do that. And because the privacy
rule applies only to groups that misuse or disclose health
information, such as providers, health plans, and health
information clearinghouses, there can be no direct penalties
assessed against anyone other than these groups. HIPAA does
permit States to have more protective privacy laws and a number
of States have laws that address these concerns.
Representatives Markey and Capps offered an amendment to
address these privacy and security concerns. Their amendment
(1) requires patient consent to share personal health
information electronically and allows patients to control
access to their sensitive electronic health information; (2)
applies protections to any individual in possession of personal
health information; (3) allows individuals to get redress when
their privacy is breached; (4) requires notification to
individuals if their information is violated; (5) requires
reasonable safeguards, such as encryption of data; and (6) does
not preempt more protective State laws. The Markey-Capps
amendment was defeated on a party-line vote.
THE LEGISLATION FAILS TO PROVIDE ADEQUATE RESOURCES TO ACQUIRE HEALTH
INFORMATION TECHNOLOGY
H.R. 4157, as amended and reported by the Committee,
provides an extremely limited amount of the funding necessary
to encourage physicians, hospitals, and other providers to
invest in technology. The bill authorizes $40 million over 2007
and 2008 for integrated healthcare systems serving uninsured,
under-insured, and medically under-served individuals, and also
to small physician practices. By contrast, S. 1418, which
passed the Senate unanimously, authorized $652 million over the
2006-2010 period for health information technology.
The lack of sufficient funding to enable providers to adopt
health information technology is a critical flaw in the
legislation and will make it unlikely that this bill will
initiate a large-scale movement to electronic provider
communication and improved quality and more coordinated care. A
number of Democratic amendments were offered that would have
provided substantial funding for IT in order to encourage
faster and more comprehensive adoption of such systems.
Representatives Brown and Gonzalez offered an amendment that
would ensure all providers would be eligible for grants,
Medicare add-on payments, and low-interest loans;
Representative Stupak offered an amendment focused on rural
providers; and Representatives Wynn, Rush, Solis, Schakowsky,
and Engel offered an amendment to address the needs of safety
net providers. The amendments were all defeated along largely
party-line votes.
THE LEGISLATION OPENS NEW OPPORTUNITIES FOR FRAUD AND ABUSE
Instead of assisting the funding of health information
technology, H.R. 4157 loosens current fraud and abuse laws to
allow hospitals, group practices, prescription drug plan
sponsors, and Medicare Advantage organizations to give free
health information technology, maintenance, service, training,
and more to other providers.
These existing anti-fraud laws, known as the Stark self-
referral and anti-kickback laws, protect Medicare and Medicaid,
as well as patients against biased decision-making by doctors,
and ensure that doctors are not referring patients to a
specific hospital or other provider because of free gifts they
are receiving. While it is important to leverage private sector
dollars for the adoption of health information technology, it
can be done without increasing the possibility of fraud and
abuse. H.R. 4157, on the other hand, provides the broad waivers
to the law, which present particular problems:
First, allowing a provider to give valuable free goods and
services to another may influence decision-making in favor of
the donor. In fact, the Congressional Budget Office noted in
their analysis of the fraud loopholes in the Committee on Ways
and Means legislation that while the language prohibits
explicit quid pro quo, in many instances it would be implicit
and assumed, resulting in fraudulent behavior.\2\
---------------------------------------------------------------------------
\2\ Congressional Budget Office letter to Committee on Ways and
Means Ranking Member Charles B. Rangel on H.R. 4157, June 15, 2006.
---------------------------------------------------------------------------
Second, the exemption does not require that the donated
technology meet interoperability standards. Because a hospital
can provide a physician with free technology that only works
with the hospital's own technology, this allows the creation of
technology silos across the country--areas where a physician
may only be able to electronically communicate with the
hospital that gave the physician the free technology, and no
one else, including other hospitals or the Government. This
runs directly contrary to promoting technology that will allow
providers across the country to communicate with each other.
Third, there is no sunset on the provision, meaning that
even when technology becomes very inexpensive, as most
technology eventually does, the exemption and potential for
abuse would still exist because hospitals will still be allowed
to influence other providers with support and maintenance
services.
Fourth, although the exemptions do not permit a hospital to
condition the donation of technology to a doctor on the receipt
of referrals, a hospital is allowed to take into account the
volume and value of referrals a physician provides to the
hospital in determining to whom todonate technology. This means
the hospital could choose to reward the physicians that give the
hospital its most valuable referrals, such as those with a high
percentage of insured patients, and thus implicitly punish the others.
Fifth, the technology a hospital may give a physician may
not be the best choice or fit for the physician, but without
other incentives or funding to help the doctor, the doctor may
have no choice but to accept the technology that is offered or
remain a paper-based practice.
Sixth, the definition of health information technology and
services is broad, making the potential for fraud and abuse
greater.
Representative Pallone offered an amendment to provide
direct funding to providers through grants and loans that
leverage private sector dollars while reinstating the current
law fraud and abuse provisions. The amendment was defeated on a
party-line vote.
THE LEGISLATION FAILS TO ACHIEVE INTEROPERABILITY OF HEALTH INFORMATION
SYSTEMS
H.R. 4157, as amended and reported by the Committee,
requires the National Coordinator to endorse standards for
electronic communications that would allow providers, health
plans, and others to communicate with each other by August
2009, or earlier if required under the schedule the National
Coordinator establishes. The bill, however, does not require
the adoption of standards in the key areas of laboratory
information, drug prescribing, clinical research, and
ambulatory and inpatient electronic health records, and thus
fails to guarantee national standards in these critical areas.
Instead, the bill leaves the National Coordinator full
discretion as to what standards to adopt.
The bill also does not require the Federal Government to
provide a leadership role by incorporating the standards of
interoperability in its use of health information technology or
purchases of health information technology. Similarly, no other
providers or health plans are required to incorporate the use
of the standards, nor are incentives included to encourage the
use of the standards. The bill merely requires the Federal
Government to receive information electronically in a format
that meets the standards. Therefore, the Government would not
need to implement or use all the standards for electronic
communication, therefore allowing fiefdoms where only a handful
of providers can communicate with each other electronically.
Representative Eshoo offered an amendment to require the
adoption of standards for key areas of health information
including, at a minimum, laboratory information, drug
prescribing, clinical research, and ambulatory and inpatient
electronic health records within 18 months of the enactment of
this act. This amendment also requires the Secretary of Health
and Human Services to ensure that any purchases of health
information technology or systems by Federal health programs
meet the national standards of interoperability developed by
the Government national task force. Finally, it requires the
Federal Government to develop a voluntary certification process
allowing buyers of health information technology to know about
the system they are purchasing and whether it meets standards
of interoperability. This would have encouraged an informed
marketplace where providers and others purchasing hardware and
software could assess more fairly and easily which technology
best met their needs. This amendment failed on a party-line
vote.
CONCLUSION
The reported bill fails to (1) ensure providers have
sufficient resources and incentives to acquire health
information technology; (2) require the development of
standards to allow electronic communication among providers in
the key areas of lab data, prescription drug data, research,
and ambulatory and inpatient data in a timely fashion; (3)
protect patients and the taxpayers against fraud and improper
kickbacks; and (4) protect patient privacy in this new
electronic world being promoted in the bill. For those reasons,
we oppose H.R. 4157, as reported.
John D. Dingell.
Henry A. Waxman.
Edward J. Markey.
Rick Boucher.
Edolphus Towns.
Frank Pallone, Jr.
Bobby L. Rush.
Anna G. Eshoo.
bart Stupak.
Eliot L. Engel.
Albert R. Wynn.
Gene Green.
Ted Strickland.
Diana DeGette.
Lois Capps.
Tom Allen.
Jan Schakowsky.
Hilda L. Solis.
Tammy Baldwin.